§LORD CHAMPION moved Amendment No. 64:
Page 31, line 39, leave out from beginning to end of line 43.

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The noble Lord said: My only reason for moving this Amendment is to probe a little into what is in the mind of the Government and the Secretary of State in regard to subsection (2), particularly paragraph (b). In paragraph (a), the Secretary of State is taking to himself sweeping powers over the finances of the water authorities. It states how they may be directed to discharge their functions with a view to securing a certain rate of return on the value of their net assets. But that is after the general duty imposed upon them by subsection (1), which I need not read out but which is wide enough. Then, in paragraph (b), the Secretary of State may impose some other obligation upon the authorities in addition to that mentioned in paragraph (a) of this subsection. I think we ought to know what is the possible further financial obligation that the Secretary of State may impose upon them.

§
I cannot remember a Bill setting up an authority in which the Government retained such a tight control on every aspect of the authority's work. First, under Clause 1 general policy and planning is firmly in the control of the Ministers; and in Clause 5 the Secretary of State gives to himself wide, all-embracing powers of direction to water authorities on every aspect of their functions. This ought to cover everything. Then Ministerial control is rubbed in in various
1220
clauses of the Bill. In this Part III, with its Clauses 26, 27 and 28, we see that each of them has one or more phrases talking of the powers of direction given to the Secretary of State. It seems to me that by the time the central policy-makers have made their decisions on policy and planning and chairmen have been appointed to the water authorities by the Secretary of State to see that the Secretary of State's policy is carried out, and by the time directions have been given under Clause 5 and so many of the subsequent clauses, the regional water authorities will have to dance to the strings pulled by the Ministers. That being the case, I think it is justifiable to ask: what is exactly the purpose of paragraph (b) of subsection (2) of this clause? I bee to move.

VISCOUNT COLVILLE OF CULROSS

I rather thought that the noble Lord, Lord Champion, might be moving a probing Amendment here. I was interested to hear what he had to say about the powers to give directions and the general control by central Government, because we shall probably come to a stage, on Amendments a little later on, where this sort of aspect will be crucial to some of the points that are raised; and I think the balance ought to be got right. The powers of direction we are talking about here are much more general than particular; they deal with policy rather than detail. It is into this sphere that the particular paragraph that we are considering at the moment falls.

I think I must put it in its context by going back to the Consultation Paper, which I know very well noble Lords opposite will have looked at. This related. the noble Lord, Lord Champion, will recall, to economics and finance. It was a Paper issued by the D.O.E. and the Welsh Office last year to try to work out the economic and financial objectives of the reorganised water service. It pointed out that a pretty comprehensive study was needed. The methods of financing the water service would in any case have required review because, as has been realised by anybody who has been involved in the amalgamation of the present, comparatively minor undertakings—not minor in importance, but small by comparison with the regional water authority—the financial situation as between one undertaker and another has
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varied greatly, and when you amalgamate them into very much larger organisations and units then this is something which clearly has to be looked at carefully. I think the real point in the Consultation Paper, if this needs to be followed up, is in the very beginning paragraphs, paragraphs 1 to 3, which I will not quote at this stage because I am sure the noble Lord remembers.

That study has been set up, and the results it produces will be the basis for discussions among the Government, the water authorities themselves through the National Water Council, and the interested bodies. So we have a great deal of work to do. I will explain why we have provided this power in advance of that work having been completed. The results of it will be the basis of the subsequent negotiations, and then there will be general guidance to the water authorities. We think that my right honourable friend the Secretary of State needs to have this reserve power in order to produce effectiveness and consistency, because it does not follow that paragraph (a), which is the target rate of return, is going to be an achievable criterion to set for the financial future of one or more, or indeed any, of the water authorities.

The reason for this, I think, is comparatively simple if one considers the range of the undertakings that there is at the moment. There are some statutory water companies with one system of accounting, and they would have asset values in their books. But there are not a great many of them, particularly after the amalgamations which have taken place. The vast majority are local authority-based water boards, consisting either of one area or of a combination of several areas, and their financing has been done on an entirely different basis. They have borrowed money over the years in the ordinary local authority way, the loans have been paid off and, at the end of that, there is on the books certainly nothing very tangible in the way of asset value. Therefore, if you are going to require a return on valued assets you have to get the valuation of the assets. When I was discussing this subject with those who have been advising me in the Department of the Environment, I remembered from my own rating experience that for some time water undertakings have been rated on a formula. So not even for the purpose
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of rating has there been any attempt actually to seek out the pipes and discover how big they are, how old they are, how leaky they are or the contrary. Therefore one has to face the possibility that the asset valuation of these undertakings may prove to be so difficult as to have to be abandoned.

In those circumstances, one must have some alternative, but at this juncture, in view of the sort of study and consultations that I have been talking about, what it is likely to be is a matter of speculation. It is not therefore necessarily an additional criterion, as the noble Lord said, or an additional basis, but it may prove to be an alternative basis to that which is in paragraph (a). I think, and I hope the Committee will agree, that, with those practical difficulties that I have been talking about and which I believe those who know the water world will recognise as being a fairly accurate description of the capital asset value in this particular business, we must have flexibility; but, as the Committee will appreciate, if we want to use other criteria then there is machinery in this clause to control the criteria that we in fact put forward. It may therefore be that, with that promise of the possibility of looking at it again if other criteria are in fact to be used, the noble Lord will be satisfied. But that is the explanation why we think we should have paragraph (b), and I hope it will satisfy the noble Lord.

I thank the noble Viscount for his very full reply. He has satisfied me, certainly, that something may have to be done following the consultations which I know will take place and which are in fact, I believe, taking place. Clearly, following those consultations there will have to be the general guidance that he talked about. In these circumstances, perhaps it is vital that the Secretary of State should have the reserve power to come along with something more than is actually contained in this clause itself. My only point about the whole matter is that I think it is adequately covered by Clause 5, which gives the Secretary of State such sweeping power that I should have thought it was not necessary here. It is merely a case of piling Pelion upon Ossa. I cannot object very much to that in the circumstances, and I would thank the
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noble Viscount for having given me such a full reply.

VISCOUNT COLVILLE OF CULROSS

May I interrupt the noble Lord? I think that there is a point in addition to Clause 5 why it is worth while having this specifically in Clause 26. I would refer him for a moment to Clause 26(4). If he will be kind enough to look at that he will see that the net assets test has a negative Resolution Procedure but the paragraph (b) test has a positive Resolution Procedure. This was the Parliamentary control that I was speaking about. I think the noble Lord would probably feel happier that we have spelt this out and made it subject to that safe? guard. The thing must be explained—mercifully not by me—to this House as well as to another place.

I am grateful for that further explanation. Everything that the noble Viscount has said I shall read with great interest when we manage to get a Hansard which will tell us all about it. I beg leave to withdraw the Amendment.

I would ask for further clarification from my noble friend of subsection (2)(a). He referred to it but I think that a number of noble Lords would be obliged if he would clarify certain aspects of its provisions. It says that the regional authorities shall discharge their functions so as to achieve a rate of return on their net assets not less than that considered reasonable by the Secretary of State. I would agree that the rate of return on net assets achieved by a commercial undertaking is a normal yardstick for assessing the company's profitability and the setting of a target for a rate of return is a fairly standard practice; but as the water industry, as a whole, has been regarded in the past solely as a public service and has not sought to make a profit from its activities, I believe that it has not been the practice to set rates of return on net assets—and I am talking about the past. Charges have been set to obtain sufficient revenue to meet outgoings arising from
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running and operating costs plus charges on outstanding loans. In the past, items of capital equipment already paid for did not enter into the calculation at all. That is my understanding.

To achieve a prescribed rate of return on the value of net assets is quite a reasonable operating system when it is applied to the nationalised industries which are generally in competition with private industry; but with the water in-industry, essentially a monopoly, there will be a real problem in valuing the net assets for there is frequently no alternative use for an asset to provide a yardstick for assessing its value. In other words, to base a valuation on the original cost of providing the asset would be entirely misleading. Alternatively, a sys? tem of valuation based on replacement costs might result in the regional water authorities having very highly valued assets—at least on paper. That is a situation which could result in a considerable increase in charges even if the prescribed rate of return were to be very small. Furthermore, is it reasonable that an R.W.A., as a result of a prescribed rate of return, should accrue vast sums at the expense of the consumer and for which it has no particular need in the foreseeable future?

Therefore, could my noble friend possibly give an assurance that any prescribed rates of return will pay due regard to the future requirements of individual—and I stress "individual"—regional water authorities? There are ten of them. Also one would hope that, particularly in the early years, a high rate of return will not be prescribed so that capital reserves required by the regional water authorities are established and spread over a period of time. It is normal that the rate should be spread over a reasonable number of years. With a view to lessening the impact I should have thought that it would be fair to expect, under the new system described in the Bill, that the proportion charged towards future capital provisions should only increase to the extent that outstanding debts of the past (debts on loans for capital items already provided) diminish. In other words, there should be a balance in that respect; for at present consumers are paying for these outstanding loans on capital items already provided.

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The introduction of the new system under the Bill will result in the consumer paying also for future projects, so that in effect they will be paying twice. Could my noble friend please explain the Government thinking on this process of change over from a charging system based on historic costs to more or less self-financing authorities?

VISCOUNT COLVILLE OF CULROSS

I shall try to do so but, for some of the reasons I have explained already, I do not think that my noble friend Lord Merrivale can expect me to give the answer as to what this may turn out to be. It is perfectly true, so far as I know, that the large majority of water undertakings in the past—and I am talking about the water boards rather than the water companies—had no criteria of this sort at all. They came along for charges from to time under Section 40 of the Water Act, and they justified the necessary amount to meet the costs that they foresaw and the demand that they foresaw. They had other projects for abstraction schemes for which they would borrow money—and the water companies did the same and got another Order under the Water Act—and this sort of finance in paragraph (a) does not apply under existing law.

My noble friend says that this was a normal kind of thing to do in the case of nationalised industries where they were in competition with other industries. As I understand it, although I am not an expert, I do not think that that' is altogether right. I thought that the return on assets test was one which was now fairly commonplace among the nationalised industries, the gas and electricity authorities and others, even if they were not directly in competition with anybody else. We therefore get a changeover here to something which is much more normal in terms of a nationally financed undertaking. When one looks at the financing —and noble Lords opposite are going to invite me to do so in later Amendments to the Third Schedule—the scheme of financing is very much one of national finance under the control of the Treasury, for reasons which I shall explain later.

If this test can he used at all (and this is very problematical for the reasons I have explained to the noble Lord, Lord Champion) we are at the moment merely going on to something fairly
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similar, in principle, in the public field. My noble friend said in effect that it was going to be difficult to value some of these undertakings. I can agree with him on that. I doubt whether the profits method of valuation would be very much use for some of these undertakings, although battles have been fought in the past—in the rating world, at any rate—on the profits basis for water undertakings. One would then probably have to fall back on that famous last resort, the contractor's test; and in order adequately to carry out that test you have to know exactly what apparatus you have, whether a large number of mains are under streets and various other places, In some cases, because the mains are very old and you are not quite sure what they are, where they are or how old they are, the question of obsolesence on the capital value produces formidable problems before it is possible even to start inquiring into the proper rate of return and the proper rate of interest. This again is a problem fraught with difficulty when you are employing the contractor's test. I can therefore, quite apart from the manpower involved, foresee formidable technical difficulties in actually carrying out this exercise, and this underpins what I was saying to the noble Lord, Lord Champion. I agree with my noble friend Lord Merrivale.

In the last part of his speech, the noble Lord referred to the aims we ought to attempt to achieve—for instance, to get a rate of return relevant to the individual regional water authority and to deal with possible double effects of paying off old loans and financing future schemes at the same time. This is the area where the consultations will be of extreme importance, and I cannot forestall those consultations. I cannot preempt the whole method of discussion which is now going on and the study which is under way. I think my noble friend has raised important points, which obviously are going to affect and interest, and possibly worry, a number of people. All I can do at this stage is to say that I will pass on to my honourable friend, and indeed my right honourable friend in another place, the sort of objection my noble friend has in mind so that these may be considered, together with all the other problems that are inherent
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in the whole system of return on net assets. It may be that he has put his finger on some very awkward questions, but I do not think that at this stage I can give him a definitive answer and do more than make that promise.

§LORD CHAMPION moved Amendment No. 65:
Page 32, line 21, at end insert ("and shall prepare and submit to the Minister a scheme (in this Act referred to as a Charging Scheme) setting out their proposals in respect to subsections (3). (4) and (5) below and the provisions of Part 1, of Schedule 7 to the Water Resources Act 1963 shall have effect in relation to a charging scheme as if any reference to a draft statement were a reference to a charging scheme as prepared by the Water Authority.").

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The noble Lord said: Clause 27 deals with the fixing of charges for water by the regional water authorities and leads on to the schemes to be prepared under Clause 28. The present position in relation to charges is that under the Water Resources Act 1963 charges are formulated over five years and are subject to a reference to a public inquiry and to a ministerial decision.

I am grateful to the noble Viscount for putting me right. But the facts remain the same. The charges are subject, under the Act of 1945, to a public inquiry and to a ministerial decision as to whether or not the river authority's charges are reasonable. This is as I understand it. Public inquiries into charges have been a feature of charges both under the Water Act and under the Water Resources Act. As a result of representations at such inquiries there have been changes, often quite substantial.

It is clear, therefore, that the public inquiry system has been effective, and
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there is no reason to suppose that it would not be effective in the future. The new procedure is much less direct and much less equitable. It appears to be based entirely upon administrative convenience—namely, that the Department would like to dispose of some of its work load and that the regional water authorities will know best. As I understand it and as I am advised, under the 1963 Act there has been only one five-year period of charges, and assurances were given by the Government that it would be possible to reassess the criteria deployed in 1969 and that there would be an opportunity to review the whole operation of charging schemes by a public inquiry. Public inquiries into charging schemes might be felt to be a waste of time but I assess that the farther you get. the farther you take Executive decisions away from the affected people, the greater the necessity for some form of inquiry of this sort. Certainly public inquiries are a valued part of our democratic processes, for they enable the man in the street, or the organisation, to feel that they have a right to challenge a particular charge or set of charges. Further, they enable one set of abstractors to hear the arguments of another set of abstractors, and often by the confrontation between different kinds of objectors a fuller measure of agreement can be reached. In future, under this Bill the ordinary man in the street will not have any vehicle for attacking his water costs. The charges under the Water Resources Act did not come in until 1969. The new principles on which charges were based have only been applied once, and users have been distinctly led to believe that there would be an opportunity of revising, these criteria at a subsequent public inquiry when the charges for the next quinquennium came up for review.

Clauses 26 and 27 of the Bill have the effect of dismantling the present system of charges and of allowing regional water authorities to create their own criteria, subject to suggestions from the Secretary of State in conjunction with the National Water Council. The system of appeal against the level of charges and reference to the Secretary of State for determination are to be abolished by this Bill. This seems to us to be a retrograde step, and one which, in view of the additional factors to be incorporated in the water
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charges, may seriously affect, among others, agriculture. I need not go into previous decisions which, apart from spray irrigation, excepted agriculture from water charges. I am not thinking only of agriculture in this connection. I believe that water users as a whole ought to have the right to question the decisions of the regional water authorities on their charges and charging policy. I would certainly not think it right in this day and age, merely because we have changed the name of the authorities, to remove a right which consumers have had. That seems to be what we are doing in this Bill. The Bill is changing the name of the authorities and giving them much more work but is at the same time removing something which has proved somewhat of a safeguard for water consumers in the past. I beg to move.

I may have interrupted the noble Lord, Lord Champion, a little early. I have a feeling that he might have been more interested, when moving this Amendment, in the water charging schemes as they affect prices charged to the individual, as it were from the pipe, rather than the charges for the abstraction from rivers. I think that this Amendment covers both. The noble Lord is perfectly right that under the Water Act of 1945, where it came to the charges that the water com? pany or water board make to the public in their homes or their factories, per thousand gallons or whatever is the figure, there was a public inquiry. Similarly, for schemes to lay down sums of money per whatever was the figure under the Water Resources Act there was a public inquiry. I had taken it that the noble Lord's argument was likely to be slanted more towards the price the public had to pay in their home, factory or shop, though I am quite prepared to deal with both sides. I am sorry if I interrupted the noble Lord too early.

In a previous incarnation, when I was at the Bar, I was involved in quite a lot of Section 14 inquiries under the Water Act. I know how they work and the sort of points that arise on them—I do not think that I have ever been involved in an inquiry under the 1963 Act—and so I was interested to see the abolition of the public inquiry as part of the scheme in this clause. I confess that when I first
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looked at it I too wondered why, because I know that many people feel it to be a safeguard. One objector confronts another and they have the opportunity to question the officials, at the moment the river authority or the water undertaker according to the kind of inquiry that it is. There is an inspector who makes certain studies afterwards and who asks questions, and then it goes to the Secretary of State for a decision. I know that people have thought that this was a valuable right. It is certainly one that they use, as I know from experience. If people do not attend the inquiry they write letters.

If I may concentrate for the moment on the Section 40 procedure under the 1945 Act, there is one point which I think one should bear in mind. This is not to detract in any way from the ability and perspicacity of inspectors, but when you have the charging scheme to put up maxima there are two difficulties. Normally speaking, as the noble Lord said, the water undertaker puts up maxima for five years because, apart from exceptional circumstances, he can? not come back for five years; so he does his sums as best he can and introduces a draft order for a maximum. Although it purports to be, as it were, a phased increase, in law there is nothing to stop him from applying the maximum immediately. I do not think that many water undertakers do that, but it is not quite the safeguard that some people may think.

The other major trouble about these inquiries is that although a great deal of time and work is put into the forecasts about supply, where the water is to come from, the cost and the demand, how this is increasing and the sort of new industries coming into the area, and so on, the primary exercise is to see whether the sums work out right and justify the charges which are being put forward for confirmation by the Secretary of State. What you do not very often get, except somewhat as a byproduct, is the lack of management objective and efficiency in the whole running of the undertaking. If you did, the inspector, who is an engineer, would not necessarily be the right person. I think, to deal with the management aspect of an organisation of this sort. If he cannot, or does not, and usually he does not, look at it in the case of a comparatively small undertaking, still less
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would it be possible for him to do so in the case of a very large regional water authority. Therefore, although I fully agree that these inquiries of both sorts give an opportunity for people to air their views, and to air them in a very forceful way, as I know well from experience, it may be that they are not quite so full a safeguard as some people might like to think.

Therefore I ask what are the other methods whereby the users, the abstracters and others can see that their proper rights are being preserved. It is rather a long list, but I think I should tell the Committee what it is. First, we have the study that I have talked about already, about financial and economic objectives. The reports, and there will be several of them, will be published as consultative documents and will include principles of charging and cost allocation; so that the basic principles for running the authority will be available for the public to look at and discuss, and possibly to debate here or in another place, and certainly to comment on in their own locality. Then we have in the Bill a number of statutory provisions which will go some way to protecting the individual and I ask the noble Lord, Lord Champion, to follow these with me because they are of some importance.

The first of them is in Clause 27(4). Here we have a requirement that in fixing the charges for service facilities or rights—that includes supply or abstraction—the water authority must have regard to the cost for performing the services, providing the facilities or making available those rights. So they must have a balance between the actual costs and the charges that they make; it is a statutory requirement. Then under Clause 27(5) they have to make certain that there is no discrimination against a particular sort of user; and I suppose that in an extreme case there is a possibility here of discrimination being challenged, perhaps even in the courts. I should have some difficulty in setting it up, but I think that might be done. All that is backed by the power to issue a direction by the Secretary of State under Clause 27(3), and I am coming on in a minute to how you get at the Secretary of State, because obviously that is important.

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Then the charging schemes are to be published under Clause 28(4) showing the methods and the principles, so that they get adequate publicity. Again I think that would be the stage at which challenge on ultra vires might be put forward. There can be under such schemes a direction under Clause 28(3) as well as again from my right honourable friend. How does one expect the public to invoke my right honourable friend on this matter? First, one would expect a member of the public to go to the body concerned, the authority, probably through the local authority members, because there would he a preponderance of local authority members on these authorities, and we hope that in the first place aggrieved members of the public would go to their own local authority member and ask him to raise the matter. If they got no joy in that way there would always he my right honourable friend who might be approached direct, or via a Member of another place or of your Lordships' House. So there is that avenue. Here there is one small point where there is still a public inquiry and which I will, as a footnote, draw to the attention of the noble Lord, Lord Champion. Where you have a supply of non-domestic water, if the noble Lord will look at Clause 28(6)(b) he will see that we have especially retained Section 27 of the Water Act, which provides that a non-domestic user can ask for a supply and that the water undertaking can give it to him, or refuse to give it to him, or give it to him on conditions: and if he is aggrieved in any way there is a right of appeal to the Secretary of State and there can he a public inquiry. So there is one public inquiry retained although, I agree, for a specific purpose only.

Finally, there is the whole question of audit. This has been revolutionised to some extent by the local Government Act of last year, and this system is being put into the Bill. The consumer or abstractor will be able to appear, and he will be able to object, probably by means of drawing attention to one item in the accounts that the auditor will have in front of him. The auditor will investigate it; he will report on it, and the report will appear in the published accounts. I know I need not go into the question of default, because noble Lords will remember this. If something of this sort is raised, the auditor
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will in any event, as I understand it, continue to investigate it. He will not just do it for the year when it is raised. If it is a question of cost effectiveness, headquarters' expenses or something like that, if investigations are put into operation by complaint or objection, I understand that he will look at it again next year and will continue to report upon it. So there is quite a large battery of methods by which the public will be able to go on scrutinising, taking to pieces, inquiring into or putting pressure upon a number of different authorities; and there are, as I have attempted to explain a number of different remedies which will be available.

Having said that, I must draw attention to paragraph 39 of Circular 92 of 1971, where it says:
It is intended that there should be statutory safeguards"—
those are the ones that I have tried to explain—
to ensure that the costs of the Regional Water Authority's operations are distributed equitably between different categories of water user. The Government do not however think it appropriate that Ministers should concern themselves with the detailed levels of charges.
It is precisely because of what I have attempted to describe as the limitations of the old form of public inquiry, and what was not really a very true ministerial control, although it appears to be so, that we have attempted to base the power to bring objections and complaints at the higher level of principle and at an earlier stage of the scheme, and made it rather more general than to lay down requirements for Ministers to scrutinise every detail of these regional water authorities' charging schemes.

It is for those reasons that we think we have not taken away the balance; that we have not deprived the public of the rights that it ought to have to scrutinise and complain about these things. Together with the other statutory provisions that I have described, we feel now that the particular kinds of public inquiry to which the noble Lord referred may have served their day and that we have adequately replaced them. I am sorry if I have taken rather a long time to explain this point, but it is an important one which interested me very much. I anticipated that the noble Lord would like it fully explained, but if I have done it rather too fully, I apologise.

I am bound to say that it did not seem to me that the noble Viscount said a word too much. One of the difficulties facing him across these Boxes is that in so many ways he has had a previous incarnation and has appeared before inquiries of this sort. I must say that had I been an inspector at one of them, and had the noble Viscount spoken then as he has spoken now, I should have been blinded with science. He says that to his knowledge the right of inquiry has been used, and the right of inquiry is one which we value very much within our system. It has been laid down in many Bills. The right has been acknowledged, felt and used by many people in the past. I still feel, despite everything the noble Viscount has said, that we ought somehow to preserve that right under the new system. I have carefully made a note of all the points he has put forward. Each and every one has validity, but the whole taken in total does not seem to be to replace the right of people to cause a public inquiry to be held, to appear themselves before such a public inquiry or to employ somebody of the standard of the noble Viscount to appear for them in order to safeguard what they regard as their right.

Due to the technical points the noble Viscount has raised, I shall have to read carefully what he has said and go through the various sections he has mentioned. He indeed produced a formidable list, but I am bound to say that it seemed to me to be no substitute for the sort of inquiry which I think should be available to the public. I believe this more particularly because we see that under the Bill decisions are to be taken farther away from the people. There seems to me to be a loss of democratic control as a result of this Bill, despite the fact that the local authorities are going to have a majority on the regional water authorities. Decisions are going to be taken, I think, much farther away than under the river authorities of which there are so many more and which are more local in character.

I do not say that people are going to be annoyed, but they are bound to feel that they have lost something which is of value to them. This certainly applies to the National Farmers' Union—and I must admit that most of the brief I have used came from the National Farmer's Union. What they have said in this connection I regard as applying to other water users,
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because very many will be affected by this Bill. However, in the circumstances, this is something upon which I should not care to ask the Committee to divide. I will, as I have said, consider this matter further; I will consult with those who advise me between now and the Report stage, and perhaps come back to it again. That is not a threat or even a promise, but it just might happen that I will do so. In the meantime, I beg leave to withdraw the Amendment.

§LORD HENLEY moved Amendment No. 66:
Page 32, line 38, at end insert ("but nothing in this subsection shall be treated as prohibiting the North West Water Authority from giving supplies of water at preferential rates to consumers in so much of the County of Cumbria as comprises the area designated as the West Cumberland Special Development Area in an order made or treated as having been made under the Local Employment Act 1972.")

§
The noble Lord said: Subsection (5) of Clause 27 allows a water authority to make different charges in different cases, but it goes on to enjoin the water authority not to show undue preference towards or to discriminate unduly against any class of persons. What I am afraid of here is that the power to make different charges in different cases is taken away by the subsequent words in the clause, and may prevent a water authority from taking into account any special circumstances. My Amendment seeks to put it beyond doubt that, at any rate, the North West Water Authority should retain the power to give supplies of water at preferential rates at least to the West Cumberland special development area. I feel that there are special circumstances in West Cumberland and that the provisions of this clause can have an adverse effect upon the development of industry there. I think this possibly also applies to other special development areas as well. I am not quite sure what other special development areas might be affected, but I have it in mind that the Tees-side area might be one of them.

§
I hope the noble Viscount, when he answers for the Government, may think fit to put forward some such Amendment as I have put down, dealing not only with
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the North West Water Authority but with other authorities elsewhere so that they, too, may know beyond doubt that the power to make charges for special reasons was not to be taken away. The reasons are the same in any special development area. As regards Cumberland, the Government have recognised that this is an area where special difficulties exist and where for some years the rate of unemployment has been greater than almost anywhere else. From time to time the Government have made special attempts to induce industrialists to go there. One such inducement has been in fact to give them special facilities with regard to water. The Cumberland River Authority in the past had a private Act of Parliament to enable it to give additional supplies of water. This special arrangement will come to an end, and something will have to replace it. It seems to me that in this particular case it might assist the efforts to induce industry to enter the area by offering preferential rates to them, if this could be done under the Bill.

§
Again, the noble Viscount may feel it is quite unnecessary to put this, in terms, in the Bill and for a particular water authority to be put in this position. If he does think that, then I should like to have from him a categorical assurance that the words in the subsection—
… not to show undue preference to, or to discriminate against, any class of persons.
do not prevent the authority from making different charges in different cases. I beg to move.

VISCOUNT COLVILLE OF CULROSS

For reasons that I shall try to explain to the noble Lord and the Committee, there is a way round this other than the one the noble Lord has suggested. I hope I shall be able to persuade him that it is a respectable way and one that does not require an Amendment to the Bill in order to achieve this purpose. I should like to make one detailed point. We know of an individual agreement that has been made in West Cumberland for a supply of water to a particular factory; and as this has been done under Section 27 of the 1945 Act to which I referred a moment ago, the noble Lord will see that in Clause 28(6)(b) that agreement will be preserved. So the individual supply there which is already in operation and has a term of years
1237
attached to it (quite a long way ahead) will be dealt with. However, I think the noble Lord was on a much more general point.

I do not think it is right, in circumstances where part of the area of a regional water authority is a regional development area, that the consumers in the non-regional development area part should have to pay more in order that those who arc in the regional development area part might pay less; in other words, undue preference as between consumers in the area is something we do not think is right. The alternative—although it would not be legitimate under Clause 27(5)—works like this. Where a grant is payable to a water authority under the Local Employment Act, 1972, for the provision of water services on which the development of industry in the area depends, there is nothing in the Bill or in other legislation to prevent the water authority using the grant to abate charges for those services to the industries which are being thus supplied. It would therefore be external money and not "undue preference" as between consumers from the resources of the water authority concerned, with money coming from the Exchequer.

There is also a power, which is equally not affected by the Bill, whereby under Section 123 of the Public Health Act, 1936, local authorities can make payments to a water undertaker for the supply of water within any part of the local authority's district. That is therefore available. There is nothing to stop a local authority and a water authority agreeing that payments might be so made to abate charges to some of the consumers in part of a water authority's area. In either case this preference would be financed from funds from central or local taxation and would therefore not infringe Clause 27(5). Therefore, quite externally to this Bill, we have powers which are not affected by it, to allow what the noble Lord wishes to take place.

This whole area is one that the study and steering group I have referred to is likely to be looking at. I cannot say in advance what they will recommend, but it certainly would be in keeping with the Government's general attitude towards the reorganised water services that preferential charges made for what are
1238
really social reasons—I think that is probably how the noble Lord himself would put it—to attract industry to development areas should be financed openly on the basis of economic and social costs and benefits involved rather than by a hidden subsidy given by one set of consumers within a regional water authority's area for the benefit of another set. We would rather deal with the matter in that way; but there is nothing in the Bill which will undermine the existing powers to give central or local financial support for the supply of water and other water services in a regional development area.

I hope the noble Lord will agree that this is probably a better and more open way of doing it rather than to try to keep it wholly within the area of the regional water authority and to have this perhaps slightly unfair cross-subsidisation.

LORD HENLEY

I must say that is much the most satisfactory answer I have ever received to any Amendment I have ever moved in your Lordships' House. I must say also I was myself a little uneasy at the possibility that, shall we say, those people in the uplands who produce the water might in fact not only produce the water at no very great cost to themselves but would be asked in addition, under the counter as it were, to subsidise somebody else who might be in difficulties. So if the social cost of what we want to do here can be met locally and in what appears to me to be a more effective way than my Amendment suggested, I am sure that not only will the North West Regional Water Authority and West Cumberland be very pleased with the suggestion put forward by the noble Viscount, but I personally feel that this represents a very satisfactory answer to my question. I beg leave to withdraw the Amendment.

§LORD CHAMPION moved Amendment No. 67:
Page 33, line 1, leave out from ("provision") to second ("shall") in line 3.

§
The noble Lord said: This is a probing Amendment. The words I am proposing to leave out refer to local statutory provisions which seem to give certain groups of people an advantage over the
1239
rest of us. What I should like to know is what local Acts give this privilege, and why, and also why, when others are losing by the terms of this Bill certain rights, these people are to be exempted. I beg to move.

VISCOUNT COLVILLE OF CULROSS

This is on the face of it a most mysterious situation. The noble Lord will appreciate that when one looks at the legislation, in terms of both Private Acts and Water Orders, which governs any statutory undertaking, one goes back very often over an extremely long period of time. There have been amalgamations, and amendments, and probably the only people who really understand the legislation are the treasurer, some of the other officers of the undertaking and their Parliamentary agent, who is the person who drafts the Amendments and the Orders from time to time.

We think—though I am bound to say that I cannot quote from them—there are instances whereby, for example, a parish which had its own spring water supply gave up that water supply to put it into a larger undertaking on terms that the inhabitants of that parish who received it, say, by gravity, should not pay any water rates at all. They did not use all of the water and they handed over the supply for the benefit of a much larger area. By giving up that particular right they were entitled to, and were given by Statute, some exemption, either whole or in part, from any form of charges. This is a situation which has to be examined in detail. I agree with the noble Lord that with this reorganisation going on one cannot accept that these things can march on for ever. It will be necessary to look carefully at the details of each of them. We cannot do it in this Bill; we shall have to have, I am horrified to say, further legislation which is going to look at this mass of private legislation.

I do not think it will be done in the Bill itself, it will have to be done by means of giving powers to amend, or something of that sort, in the way with which we are fairly familiar. But there will have to be some legislation to sort this out. It will be at that stage that the merits of exceptions of this sort, or exemptions, should be considered. Mean
1240
while, as we have not the opportunity to look at them now, we think it is right that, being historically there, they should be preserved for the moment. When the detail of all the material is sorted out we will look at them on their merits. Therefore it is a holding operation and, as such, probably a fair one in view of the fact that we shall be coming back to it in detail at the next stage in this series of legislation, of which this is the first Bill.

§
Page 33, line 18, at end insert:
("(10) If as a result of the provisions of this Act or any consequential diminution in the amount or change in the distribution of rate support grant, the charges of a water authority payable by any domestic ratepayer for the year 1974–75 or subsequent years exceed by more than 10 per cent. the amount paid by such ratepayer in the preceding year as rates or charges attributable to the services transferred by this Act to such water authority, the rating authority in whose area such ratepayer resides shall reduce their rate bill by the amount of such excess and shall be reimbursed by the Secretary of State to the extent of any revenue thereby foregone.(11) In subsection (10) above "domestic ratepayer" means an occupier of a dwelling house as defined in section 115 and Schedule 13 of the General Rate Act 1967.").

§
The noble Lord said: It is pretty generally admitted that the change from the system of paying for water by the existing method, and the inclusion of sewers and sewage disposal in the charges to be paid by the domestic water consumer, will result in some ratepayers in the poorer parts of the country having to bear a much heavier burden than at the present time. There will be, as I understand it, diminution of the totality of subsidy resulting from the fact that the resources element of the rate support grant will no longer operate in respect of water and sewerage expenditure. Added to that, in the poorer parts of the country the loss of equalisation ensuing from the present resources element will be serious for the ratepayers in those areas. What this Amendment seeks to do is to temper the wind to the shorn lamb. We think that in some of these areas there will be many shorn lambs. The Amendment does this
1241
by seeking to place upon the local rating authority a duty to reduce their rate bill by an amount which will relieve any qualifying ratepayer of a substantial part of the increase in water charges caused by the provisions of this Bill.

The Amendment also provides for a compensatory subsidy to be paid to the authorities concerned out of the Exchequer. What is clear is that some such provision ought to be included in the Bill. If the Government are not prepared to accept this Amendment, what we must have is some transition period of adjustment. The necessity for this was acknowledged in the other place by Mr. Page, as reported in column 1197 of the Commons Hansard of May 1 this year. He said:
There will be a transition period, of course. We shall be faced with a similar situation as obtained on revaluation, when we found that certain individuals were suffering and decided that a transition period would be desirable, however fair and just the eventual outcome. I dare say we shall have to have a transition period in the case of water reorganisation, …
As I understand it, the transitional relief in the case of revaluation was for a limited period. If the Government do not accept the reasonable Amendment I am now moving, I hope they will be in a position to make a more concrete commitment than that given by Mr. Page. Such a commitment would enable the local authorities to enter into discussions with the Department very soon in order to avoid the difficulties consequent upon decisions being taken late in the financial year. This is a point which is very much in the minds of the associations.

§
I understand that the announcement by the Chancellor as to the relief on revaluation was made on March 6. The circular was dated March 13, and that was within a month of the financial year, which I suggest to the noble Lord is a short notice and which was the cause of great difficulty. I am asking for something more than was done in the case of revaluation. If it is not possible to grant all that this Amendment is asking in this connection, I would ask that a decision be taken soon on this question of the transitional relief, and that there will be discussions with the bodies concerned. I beg to move.

VISCOUNT COLVILLE OF CULROSS

The noble Lord, Lord Champion, and his noble friend Lord Garnsworthy have
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been the cause of a wet towel being put round my head in order that I should try to understand this Amendment, and also Amendment No. 93 which is on a similar point. Heaven forfend that I should attempt to explain—because I should get it wrong—exactly how this works! I think I understand it, but any explanation is likely to be misleading. Unless I am forced to, I shall attempt to restrain myself. The point that the noble Lord, Lord Champion, is on is a perfectly valid one. Obviously, the rating authority does not want to be faced at the last minute with a change in the rate of rate support grant or some form of subsidy. Plainly, too, we must make sure that the shift, for instance, of the sewage and sewerage side of what are at the moment local authority services away from the area of rates and rate support grant into the area of the water charges under the Regional Water Authority is not going to have a devastating effect upon the rates paid by individuals in their homes or offices. This is something we take on board just as enthusiastically as noble Lords opposite are enthusiastic about it.

There is no simple answer to this problem. First of all, the Amendment that the noble Lord has put down—and I take it in the spirit in which it has been moved as being a helpful suggestion of the way in which one might do it—would in fact produce, as I think noble Lords would appreciate, a permanent subsidisation; and this is something we want to avoid. I do not think we want to have built into this measure, as it were, a crystallisation of the present situation, particularly when the whole of local government is being reformed and when the pattern of this year, the rate poundages of this year and the district councils' finances, will be wholly superseded by an entirely new pattern of local authority next year, so that even within the new district councils there will be a shift of burden of rates and benefit of rates as between one part of the new district and another. To superimpose upon that an attempt to equalise or take account of accurately the effect of the transfer of the sewerage charges and one or two other very small elements which get into the rate support grant, at any rate in some places, is a very complicated and difficult matter to provide for
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legislatively and I am not sure it would ever be able to be worked out in practice.

Therefore, what the Government have done about this matter is to give the assurance that I think the noble Lord, Lord Champion, is asking for. He was quoting from my honourable friend the Minister in another place in one part of the OFFICIAL REPORT. I would draw his attention to the Report stage of the Bill, at column 1021 of the Commons OFFICIAL REPORT of May 1. This is exactly on the point. What my honourable friend said is this:
I gave an assurance in Committee that in taking a decision about the appropriate level of Exchequer grant—to local authorities"—
rate support grant—
after reorganisation we would take full account not only of local government expenditure but of the fact that ratepayers in future will be paying directly for some water services"—
this is mainly sewerage but also a little bit of fisheries and a little bit of pollution and in some cases precepts for water undertakings—
that are at present paid for by local authorities from rate or rate support grant. I did not mean that the distribution of the grant among local authorities will be precisely the same.
Again interposing, that is because of the reorganisation itself and the superimposition of this change in the actual imposition in the form of charges rather than rate expenditure. My honourable friend continued:
The effects of local government reorganisation and the shifting of responsibilities from local authorities, and all changes in local government finance"—
and that is the third point: changes in local government finance which we are due for?
are bound to make substantial changes in the charges anyhow.
The outcome of that is that I cannot say, because I do not know, and I should not be the Minister who was first told anyway, exactly what the answer to this question is. But the way of implementing this assurance is going to be precisely what the noble Lord, Lord Champion, said just now: it is going to be consultations with the local authority associations. In a subject as complicated as this I see no alternative. It is the local authority associations who will include the new kinds of local authority and will
1244
know what the system is going to be—they have their shadow authorities set up. They will be the people to discuss with central Government how we implement that assurance. I am sorry if this answer is vague, but it is a difficult subject. It would be wrong for me to try to pre-empt the result of consultations of this kind. But those are the negotiations that will go on and they will be preparing for the determination of the rate of rate support grant for 1974–75. I just hope that, spurred on by the timely reminder from the noble Lord, Lord Champion, there will not be any delay about it and we shall not have any of these last-minute complications. But it is perfectly plain from what the Minister said in another place that we are fully alive to the necessity to ensure that we do not have swingeing impositions and vast changes. I am sure, with respect, that this kind of machinery is better than the one the noble Lord has proposed. I hope that this explanation satisfies him. This matter is something we understand fully and I think that my honourable friend has gone, if not as far as we should have liked in detail, as far as anybody could expect him to go in principle to meet this criticism.

I am grateful to the noble Viscount who has answered very much the points I was putting here, particularly the point of covering this transitional period as a result of discussion with the authorities. I am bound to say (I think I ought to say it here) that I should not want to produce a permanent subsidisation this way—not permanent—although there are some factors that would recommend it, having regard to what has happened in the past concerning grants, the resources element grant on sewerage and so on. But I am fairly sure that the local authorities will be satisfied with the further statement the noble Viscount has made and his promises about early consultation; and in the circumstances I beg leave to withdraw the Amendment.

I was encouraged by what the noble Viscount said when he was dealing with aggrieved
1245
persons who might want to have their charges looked at. He finished by indicating that those of us who sit in your Lordships' House might be able to be of assistance. My mind immediately sprang to a letter I found at midday to-day on my desk, and I think this is an excellent opportunity for obtaining a fairly authoritative answer to the question that a gentleman from Hailsham has addressed to me. I would ask the noble Viscount if he can say whether there is any intention at all of action to deal with considerable disparities that exist between one area of supply and another.

I can do no better than quote the details given me in this letter as an example of what I have in mind. The writer says that he pays £1 a day for water. That means, on my recollection, that he is using over 3,000 gallons of water a day. He tells me that water supplied by the Eastbourne Water Company costs him 45–5p per 1,000 gallons. whereas in the adjacent area covered by the Brighton water authority, 1,000 gallons costs only 15p. That would seem to me a very considerable disparity, and one can fully appreciate the sense of grievance that people being supplied by the Eastbourne Water Company, particularly in view of the fact that private undertakers are to be continued, may feel. I should be grateful if the noble Viscount can indicate whether there is any intention at all of dealing with this kind of anomaly, and, if there is, how and when.

Perhaps I may add a few words to what the noble Lord, Lord Garnsworthy, has said. I want to raise briefly this question of safeguards against discrimination. As I understand the present system, almost all public suppliers and all river authorities arrange charges for water supply and direct abstraction so as to eliminate discrimination between one class of consumer or abstractor and another. Under the future system—that is, without the previous appeal provisions which the noble Lord, Lord Champion, preferred—I think there could be a greater risk of discrimination between measured and unmeasured supplies of water, although here I should like to say—and I hope the noble Lord, Lord Champion, will agree—that I think my noble friend went much further in
1246
detailing the rights of the consumer than did Mr. Graham Page on May 2 in another place, and we are grateful to him for that.

One would like to see, on average, parity of charge for a metered supply as for a supply on the water rate. It is not only industry which has metered supplies: I believe I am right in saying that hospitals, hotels, schools, hostels, boarding houses and so on also have metered supplies. So I ask my noble friend whether he can give an assurance, bearing in mind the provisions of subsection (5) of Clause 27, that the Secretary of State will not hesitate to intervene in the event of discrimination being attempted or practised.

When my noble friend replies to that question, can he tell the Committee why, in subsection (5), it has been necessary to fix a date so far ahead as 1981 for the termination of any discrimination? It seems rather a long time to wait.

VISCOUNT COLVILLE OF CULROSS

There is a somewhat longer-winded method of getting Ministerial answers to letters which arrive on the desk outside than to spring them in detail on the Minister at the Dispatch Box on the Question, Whether the clause shall stand part of the Bill. I was seeing whether I could produce any definitive answer about the difference between Brighton and Eastbourne. I do not think I can at the moment, but I suppose it is obvious (is it not?) from the general principle—because although it is not a statutory principle, it is always observed in charging orders—that there is to be no discrimination between metered users and non-metered users, whatever they may be. So that as between those two classes —and as between those two classes only —one tries to balance the actual cost of the water by imposing the charges so that they fall equally and fairly upon the two classes.

It must follow, therefore, that the noble Lord's correspondent—whom I suspect is a nurseryman; and if he is not a nurseryman he is a launderer, or something like that—is in an area with a very high cost of supplies. Their source works must be very new, or they must have spent a great deal of money in laying mains recently and have had the
1247
misfortune to incure a large capital loan which they are now having to recoup by very high charges. Or it may be that they have an expensive abstraction scheme from the river. I simply do not know the facts. Probably for historic reasons the Brighton undertaking, which I should think is an amalgamated undertaking, may have inherited works which were built some time ago, on which, for all I know, most of the loan is paid off and at the moment therefore they are not having to charge a very high rate per thousand gallons.

Under the regional water authority this situation will go. There is to be a transitional provision. My noble friend Lord Amory asked why it was that we had such a long time in which to do it. We look forward to this as being two years for a minimum of change while this immensely complicated area is sorted out. So that is 1974 to 1976. After that, there will be a transitional period, which I think is fairly standard on amalgamation schemes, of five years of differentials, during which people in low-charge areas are gradually brought up to the higher charges. Or I suppose one might hope that in some regional authorities it would work the other way round and that the charge to people in high cost areas might even come clown as a result of the pooling of resources. That is the reason for the long transitional period up to 1981—simply because the initial stages will take a substantial time to sort out and we want it to be a fair transition.

I hope this will ameliorate some of the discrepancies mentioned by the noble Lord, Lord Garnsworthy. This is exactly the sort of thing that is raised all the time. One of the parts of the exercise in amalgamations has been to try to prevent these immediately neighbouring areas having these wild discrepancies in charges, and it may be that in the particular area mentioned by the noble Lord's correspondent it has not altogether succeeded. I think it is inherent in the whole scheme in the Bill that that type of thing ought to be ironed out in the course of time.

My noble friend Lord Merrivale wanted another assurance. He really
1248
wants me to spell out Clause 27(5). The regional water authority is not,
to show undue preference to, or discriminate unduly against, any class of persons.
Again, I think there cannot be any method by which one can spell out precisely what this is going to mean, but this is exactly the point of the provisions in Clause 28 for publishing the scheme that any authority wishes to put forward —a charging scheme under Clause 28(2).

I mentioned although I confess that I think it to be an obscure point and an unlikely one—that if a charging scheme is patently discriminatory and does not fulfil what is a quite plain duty in Clause 27(5), one might even go so far as to take it to the High Court. But I also mentioned, when speaking about the remedies open, that my right honourable friend has these powers in Clause 28(3) when the charging scheme is published, and indeed in Clause 27(3) when one is talking about criteria in fixing charges, and I think that this could probably comprehend the whole area of what is and is not undue discrimination. I should have thought that direction will be very rare, but it is the reserve power to give a direction that is probably the most useful thing, and the threat that it may be invoked.

I am sorry if I cannot be quite as specific as my noble friend Lord Merrivale has asked, but there would not be any point in putting into the Bill powers of direction if they were not to be used in the last resort. The usual result of having reserve powers in any legislation that I have ever dealt with—for instance, the Town and Country Planning Act, where there is a very wide reserve power for the Minister—is that it is singularly rare for it to be used simply because it is there. I think that is a satisfactory answer and it is the justification for putting some of these powers of direction into the Bill.

§
Page 33, line 22, at end insert—
("( ) In any case were charges are payable to a Water Authority other than by reference
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to the volume of water supplied any commercial consumer may request and shall be entitled to be supplied by reference to the volume of water supplied upon payment by him of the cost of installation of the meter.")

§
The noble Lord said: I beg to move the Amendment standing in the names of my noble friend Lord Jacques and myself. Had it been possible for my noble friend to be present to-day he would have moved this Amendment. His attention and mine was
drawn to this matter by the National Chamber of Trade. The Committee will be aware that commercial properties are rated in a very different way from domestic premises. Whereas rateable value is a very reasonable and easy way of determining charges for domestic water supplies, it is not always as equitable and as reasonable for the occupants of commercial premises. I am thinking here of the small trader rather than of the large commercial undertaking. If there was any doubt of the strength of feeling that exists on this matter, I think it would have been removed at the April conference of the National Chamber of Trade when there was some very heated debate. I am told—indeed, I am aware —that on many occasions that subject has caused traders organised within the Chamber to "see red". It would seem that the Bill provides an opportunity to remove what are felt by the members of that organisation to be the inequities of past years, by the simple expedient of allowing commercial users the right to a metered supply. Certainly it would enable the commercial consumer to opt for metering if he so chose. He would pay, quite properly, for the cost of the installation of the meter. The Amendment is drafted to achieve that end, and my noble friend Lord Jacques hopes, with me, that the Committee will see fit to accept it. I beg to move.

VISCOUNT COLVILLE OF CULROSS

I have heard this argument many times before, and I know that there is a good deal of feeling about it, not only among small traders but also among the occupiers, for instance, of office blocks with a very high rateable value whose water supply is only for the lavatories and for making cups of tea. They often say—not altogether without reason, perhaps—that to base their water charges on the rateable value, even although in fact this is usually reduced to half the rate-
1250
able value, causes them an injustice. I can easily understand why the noble Lord brings this matter forward at this stage of the Bill. The Central Advisory Council Sub-Committee on Water Charges, which reported in 1963, recommended that where charging on a basis of net annual value was likely to give an unrealistic result in terms of the relationship between the charges levied and the volume of water supplied, the various solutions that the noble Lord put forward should be adopted; in other words, the consumer should be allowed to ask for a meter. That recommendation, I am afraid, has never been implemented. There were reasons for that in the past, but there are rather better reasons still now.

Assuming that the present rateable value basis, charging on the rateable value, results in inequitable treatment between consumers, there is not at the moment in our hands any evidence to show that the half reduction—that is, being rated on half the rateable value, as most of these premises are—gives them a less equitable treatment, say, than domostic households with a high net annual value where one has just as many complaints. Perhaps a house is occupied by a small
family who use very little water, yet they have to pay an extremely large amount for it. As one looks across the domestic field (and when I say domestic field I mean the people who pay water rates on the domestic basis; and that includes some of these commercial premises), one see that this is not by any means the only anomaly that has to be sorted out. One has the other class of householder who complains that it is quite unfair that he should have to pay in precisely the same way as the commercial trader sometimes complains.

But, against that, what alternative has one, except possibly—and we shall come to that in due course—contemplation of universal metering? Nothing else will be fair to all concerned. The Amendment picks out one particular area, as it were, for optional metering at a time when, as I understand it, the noble Lord or one of his colleagues—perhaps it is the noble Baroness—is to move some fairly searching Amendments to question the whole of our policy on Clause 29. I believe that one has to look at this matter in a rather broader way. The
1251
broader way I would suggest is that we should stop thinking so much in terms of the way that charging orders have been made and charges have been fixed in the past. It is perfectly true that we have, as I tried to explain, made an attempt to be fair as between the two classes, the metered and unmetered domestic supplies, but we can now abandon total reliance on that, now that we are getting on to a completely different form of financing of water. That is what this Bill is all about.

I doubt whether the Committee want to introduce this piecemeal change at a time when the whole philosophy of charging is being re-examined fundamentally in the way that I have already explained (perhaps rather too often this afternoon), and at a time when we are aiming for a system which we have just been discussing and which does not show undue preference to or discriminate unduly against any class of person. I would think that commercial users of water would fall squarely within that sort of categorisation. They, just the same as everybody else, would be able to claim the protection of Clause 27(5) of this Bill, and when the charging scheme comes forward they will, I am certain—and I am sure the point will have been made before we get near a charging scheme—be able to make this precise point: that simply to stick to half the rateable value, and charge their water on that basis, does not avoid the charge of undue preference or discrimination. We now have a completely new framework of charging, and to introduce at this stage something which may have been a form of equity in the days, when we had the old system, would be a mistake because, quite apart from the clash about metering in general, it introduces too many nuts and bolts into what is meant to be a much broader machine to produce a fair and reasonable result.

There are technical troubles about this. Perhaps the noble Lord does not want me to go into minutiae. I could go through a list of them, but perhaps the Committee would rather I left it at that, on the principle that we would rather iron out this type of discrimination in the course of the general review and the general formation of new principles and policies for charging under these two Clauses—the
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one we have just dealt with, and the one we are on now.

I am most grateful to the noble Viscount for the care with which he has dealt with the Amendment. What he has had to say will I am sure be read with very great interest when people are able to read what he has had to say, and I hope that that will be well in advance of Report stage, in case there is any desire to pursue the matter further in the light of what will be on the Record. I hope very much that I have not offered a hostage to fortune in regard to the whole question of metering by speaking to this Amendment this afternoon. Let me say that I have no intention whatsoever of preparing the way for the acceptance of what many of us feel is a defect in the Bill. We shall be coming to that presently, so I will not take up the time of the Committee by pursuing the matter further. I am quite certain that what the noble Viscount has had to say will be of interest, and I hope that the outcome will be that there will be a greater understanding as between the Department and the Chamber of Trade on this matter. I beg leave to withdraw the Amendment.

§
Page 33, line 22, at end insert—
("Provided that any charges scheme based on or including the general metering of domestic water supplies in any part of an authority's area shall be subject to an order made by the Secretary of State.( ) A statutory instrument providing for the metering of domestic water supplies under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")

§
The noble Baroness said: I beg to move the Amendment standing in the names of the noble Lord, Lord Sinclair of Cleeve, and my noble friend Lord Champion and myself. This Amendment is a procedural one, but it is based on the absolute objection which all the sponsors of the Amendment share to the proposal in the Bill for the metering of domestic water supplies. The main discussion, I would suppose, would come more appropriately on Amendment No. 72A, which puts this matter in absolute terms.

I agree with the noble Baroness. If we could, for the purposes of argument only and without any concession about that later Amendment, discuss this machinery point on the assumption that there may be a retention of Clause 29, I think it would keep the two arguments apart; otherwise they may get very confused.

So far as I am concerned, I am perfectly agreeable to have two separate discussions, but I think it should be made quite plain that the reason why one is putting down the machinery Amendment is that one does not like the principle. The machinery Amendment could in itself, it seems to me, be of consequence even if the Government succeed in maintaining the principle. What worries one very much is that in the first subsection of Clause 28 it is suggested that:
A water authority may make a scheme (in this Act referred to as a charges scheme') for the charges to be paid for any services performed...
and so forth. This, of course, is permissive; it is not mandatory at this stage. But when one looks at the subsequent clause. Clause 29, one sees that where metering is concerned the Secretary of State again "may" make regulations; this also is not mandatory, it is permissive. What worries me at any rate about all this is: supposing a water authority decides in its wisdom to make a scheme which includes the metering of domestic supplies, there is nothing, as I understand it, which would force the Secretary of State at that point of time to make his regulations as to the way in which metering should be imposed and carried out.

That seems to me to be totally unsatisfactory, because if, as is assumed in Clause 29, the Secretary of State feels so much concern about this whole business of metering that he contemplates making regulations—and very detailed regulations, if one looks at the subsection—then surely there is something wrong in the formulation of a Bill which allows a water authority, or more than one, any number of water authorities, to go happily ahead before the Secretary of State thought fit to intervene? I may be misreading the Bill, but that is my interpretation of it as it stands. If I am wrong, no doubt the noble Viscount will put me right.

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I make it absolutely clear that we on this side are concerned here only with domestic metering. We have no objection to metering for industrial purposes; quite the contrary, if it is done normally, as it is now, and it can take quality as well as quantity into account. This is not part of the area of discussion at all. But we have the strongest objection to domestic metering, and, therefore, to water authorities being empowered to go ahead with any sort of scheme which is not subject to Parliamentary control. When it comes to the Secretary of State making his regulations under the next clause, that is subject to Parliamentary control by the Negative Resolution procedure. But the water authorities, so far as we understand it, can go ahead without let or hindrance, without Parliamentary control, unless the Secretary of State of the day decides that the moment has come for him to make regulations. It is on that basis, so far as I am concerned—the noble Lord, Lord Sinclair of Cleeve, will speak for himself that I beg to move this Amendment.

I am glad to be able to support this Amendment. My reasons for doing so are these. First, I am not convinced that the cost of metering on economic grounds has been justified. We have some estimates of cost, but so far as I know, they are not complete. But we have no evidence of the probable saving in usage of water from voluntary restriction by the household simply because their water bill will depend on the amount registered by the meter. While the proposition that it is fair as between one household and another that payment should be based on the water used is irrefutable. I personally have much sympathy with the argument that it is not a bad thing in these days that a commodity essential to health and basically cheap should be freely available at a cost which, while bearing some relation to the size and value of the premises occupied, does not vary with the water used, apart, of course, from the special charges for special uses, such as for hose pipes, swimming pools and so forth.

Thirdly, we know that the capital cost of universal installation of meters will be very great; £500 million has been mentioned as the possible cost. Above that provision has to be made for depreciation, maintenance and reading; and
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though the last may be a less costly factor than it used to be, because of more sophisticated methcds of recording and reading without personal inspection (so-called remote reading), we have here considerable capital costs. I feel that I must eoho the words used by Winston Churchill, at the time when he was considering the hazard of tide and storm in relation to a date for the D-Day landing. He said "I will not be a slave to the worst hypothesis". This proposition is extremely complicated I will not be a slave to the theory that it is incapable of solution, but I do not think it is justified at the present time.

Human nature being what it is, it is more than likely that once the meter ceases to be a novelty, and water continues to be relatively cheap, self-imposed restrictions will gradually ease off. When I say "relatively cheap", I mean compared with other charges that the household has to meet. There can, of course, be no doubt that metering will immediately add quite appreciably to the costs of the supply authorities, and these costs will from the outset be reflected in the charges for water. The whole case for metering must depend upon whether it secures reduction in usage to an extent which substantially postpones the need for development of new sources of supply to meet rising consumption, which we know is bound to be extremely costly. In that equation the possibility of securing economies in use through better supply arrangements, including improved types of domestic fittings, is well worth examination.

As I said on Second Reading, there has been no complete examination by an independent body of these problems since that of 1963 by the Committee of the Central Water Advisory Committee, to which the noble Viscount referred a moment ago. They examined this question in depth, and they concluded at that time, in those conditions, that metering was not justified. I am sure that within the Department of the Environment a great deal of thought has already been given to this question, but the case for a full, independent inquiry seems to me to be very strong.

In conclusion, I fully recognise that without more information than is available to-day the Government would not
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contemplate universal metering of domestic supplies, and I admit that an obvious way of getting more information would be to try it out in what might be termed a few representative areas so as to establist the probable cost, on the one hand, and the probable saving, on the other. But although it can be argued that a limited experiment cannot do much harm. I personally feel that there are great dangers in that because I believe that in practice it would be found difficult, confining the experiment to just a few representative areas, to do it for long enough to get a sound basis on which more definite conclusions could be based. That is why I support the proposition that Parliament should have the opportunity to have another look at this question before the die is cast, and that is the essential purpose of this Amendment.

I should like to support my noble friend and the noble Lord, Lord Sinclair of Cleeve. This Amendment deals with a very important part of this Bill which, as at present drafted, permits the water authorities, without any central control, to introduce a system of metering for domestic water supplies. This has so far been contrary to public policy in this country, and I think for very good reasons. Water is an essential commodity, not only for purposes of drinking but for purposes of hygiene, and an abundant supply of water has been regarded as a contribution to health. The whole object of metering a domestic water supply evidently is to restrict the consumption of water for domestic purposes. If it does not have that effect, what can be the object of it?

There is a special aspect of this matter; if the revenue from metered charges for domestic purposes were to be used for the purpose of improving water supplies for domestic purposes, that could conceivably be a good argument for making the change. But, quite clearly, that is an impossibility. Water supplies are not segregated into those for domestic purposes and those for other purposes, and every charge for water supplied goes into the general pool for meeting the costs of the total supply. More than that, we know very well at the present moment that our water supplies are far from being beyond reproach.
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They are contaminated in various ways, and one of those ways is that a very great volume of water in this country is capable of dissolving lead out of pipes and fittings in the supply system. There are international standards which in fact are not being met at the present time in this country. This is an extremely serious matter.

A survey carried out a few years ago of water supplies for 20 million people in this country showed that 95 per cent. of the supplies comprised water which was capable of dissolving lead. The most serious aspect of this matter is that after the water has lain in the pipes all night it has a higher content of lead than at any other time, and it is therefore most desirable that the water which is drawn first thing in the morning should be run to waste, instead of being used to fill the kettle for the morning cup of tea, as is the only too common practice at the present time. Very few, if any, water authorities take the trouble to advise their consumers to adopt this wise precaution. Will they be in the position to do so if they are charging the consumers by meters and, at the same time, telling them to run a substantial amount of water to waste in order to get rid of the lead which has been dissolved into the water supply during the night? This is quite ridiculous, and on that account particularly I hope that this Amendment will be carried, and that we shall not be committed to a general system of metering domestic supplies.

I respond to the noble Viscount's request that we should try to keep the two subjects separate, but it seems to me that, as previous speakers have widened the debate, it might be tidier if we did in fact deal with them together. We can deal with them in two sections of our remarks, as I am about to do. It seems to me that, as other noble Lords have referred to the much wider question of metering in general, it would be tidier if I put forward our arguments as to why we are against this whole proposition.

As the noble Lord, Lord Sinclair of Cleeve, put it very clearly, one of our reasons is that we are
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by no means satisfied that the Government have had an adequate basis for their decision to include domestic metering in this Bill. The noble Lord, Lord Sinclair of Cleeve, referred to the Central Advisory Water Committee's Report some ten years back, which came out against this. From the notes on the Bill that have been kindly provided for us by the Department, it is plain that the Government do not yet know what the balance of the economic and social arguments for and against such a proposition may be, because we are told that there are two research projects in hand, the results of which will be made available to the new authorities. Despite this, we are being asked to legislate. The results of these researches are not available either to the Government or to ourselves, so we are being asked to undertake something which, in the minds of many of us, has not been justified by any inquiries hitherto completed or published. We just do not know what these studies of the balance of the economic and social arguments may show, so it seems to be entirely wrong that we should be asked to include in this legislation something which we believe to be expensive and unnecessary.

The noble Lord, Lord Sinclair of Cleeve, has mentioned the figure of £500million. This, again, is included in the official notes. If I may remind those of your Lordships who have not recently looked at them, it is estimated that the installation of meters in all households in England and Wales would cost at least £500 million, together with substantial additional expenditure on maintenance. No estimate is given of what it would cost in increased complexity of accounting and rendering of bills to domestic consumers. At the moment, this is done quite simply in relation to the ordinary rateable value of the domestic premises concerned, which is a very easy calculation to make. But if one has to calculate on the basis of the individual consumption of every household in the country—whether or not there is a specified quantity which is free, with charges made only in excess of that amount, or whatever other system might be adopted —one can fully appreciate that this will add vastly to the expense.

The time may well come when we have some sort of computerisation, when we have some sort of magnetic tape or
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whatever it may be, which will show in one operation precisely how much water, gas and electricity has been consumed in a household, so that we shall not need a separate person to read each set of meters; but at the moment we are very far from that position. Therefore our main argument is that it is not right for the Government to include in the Bill a proposition on which its own official note states that the present high cost of metering makes it probable that installation on any general scale will not be attempted for a good many years. If that is the situation, why should we be asked now to pass general legislation permitting it? Surely, when these investigations into the balance of social and economic advantages have been concluded and when we are somewhat nearer a reliable scheme of joint metering of all the services, that will be the time, if it is still thought desirable, to come forward with properly worked out proposals on which the House might be asked to pass legislation.

The noble Lord, Lord Sinclair of Cleeve, and my noble friend Lord Douglas of Barloch have referred to the only justification in our minds for making this change in the basis of charging for domestic supplies, which is if it could be proved that on balance one would save substantial quantities of water. As I remarked on Second Reading, this process of metering domestic supplies has been attempted in certain other parts of the world. Where the costs are as low as they would undoubtedly be in this country, and as they are in certain areas of the United States—which is, I think, the nearest analogy we can find—then all experience led us to believe that the saving in the quantity consumed would be minimal. The experience in the United States—and I have some evidence here for it—is as one would suppose, that when metering is first installed there is some diminution in the total consumption, but that it very soon creeps back to what it was before. This is true in any country where the basic charge for water is as low as it would certainly be in this country. I am not speaking of certain areas, such as the Persian Gulf, where supplies are very scarce, with correspondingly high charges, and where there is a real economic incentive to save
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water. I do not believe that that would be the situation in this country and, for the social arguments which were deployed at earlier stages of our deliberations, we cannot see that the Government have any justification whatever for introducing this proposition and for asking the Committee to approve something which most of those who have studied the subject feel is entirely unjustified. I have tried to make the position clear on the procedural Amendment which is before us, in order to save time so that we shall not discuss it all over again when we reach Amendment No. 72A which puts this point very firmly.

If the discussion is being widened to the general question of the metering of domestic supplies of water, I should like to say my say at this moment, though I was going to reserve it for the later Amendment. I think that from the hygienic point of view such metering would be an extremely retrograde step. Hygiene and cleanliness start at home, and good habits with regard to hygiene are inculcated in the home. Anyone who reads the decennial Report of the Registrar General, knows that deaths from disease are more common and more prevalent the lower one goes down the social scale. This applies not only to infective disease but to various other types of disease, including certain types of cancer. We know that other factors are at work besides sheer matters of cleanliness—for example, poverty, malnutrition and so forth. But some of these diseases are quite clearly related to cleanliness, and it would seem to me to be a tremendously retrograde step to start metering domestic water. Either it would work by conserving large quantities of water, in which case it would be very bad for the hygiene of the nation and for the ethication of the nation in hygiene, or it would not conserve any large quantities of water, as the noble Baroness thinks, in which case there does not seem to be any reason for introducing such a measure.

The noble Lord, Lord Douglas of Barloch, rightly pointed out that the health authorities advise the flushing of pipes and the drawing off of water before ingesting the morning cup of tea. But how could a health authority advise that, when it knows perfectly well that its own local authority would charge for the
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extra amount of water? The same would apply to any educative measure having to do with cleanliness. Not many years ago, if one went into a public lavatory it was very unlikely that one would find any place in which to wash one's hands. Now, I am glad to say, wash basins are provided in nearly every decent public lavatory. That is a great advance, and the home habits should match up with that. We must not forget that we have a large number of food handlers, many of whom come from foreign countries, not only from the Far East and the Middle East, but also from Mediterranean countries and other places where standards of hygiene are not nearly so high as our own. Unless those people become accustomed to the free use of water in their own homes, and to general habits of cleanliness and hygiene, I am sure that we shall go backwards and that any possible saving will soon be wasted in the cost to the nation in other ways.

There seems to be an assumption by many speakers that no metering exists now. I live in a surburban area where we have had metering for many years and I do not see any objection to it. It is significant that my charge has never gone above the minimum, which shows that even if water is metered one does not necessarily have to pay more for a reasonable amount for ordinary household purposes. There is also an assumption that all water is used for hygiene purposes; but there are tens of thousands of gardens which need watering and many motor cars which have to be washed. It seems to me that if people use excessive amounts of water there is every reason that they should pay for it. I mentioned the charges in my own home. The only occasion on which I have had to pay more than the minimum charge was when the meter was leaking. I merely had to protest about that for the charge immediately to be reduced to the minimum. I do not see why there should be any objection to the metering of water so as to ensure that those who use it extensively for other purposes have to pay for it, so long as it does not restrict normal hygienic usage.

THE EARL OF BALFOUR

I think that water should be metered out in the same
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way as any other product, such as gas or electricity supplied to the house is metered at the moment. At present, water is not supplied to our homes freely; we are paying for it with a charge based on the rateable value of the house. That rateable value may be 5p, 10p, 15p or 20p in the pound, but there is one thing I can say with complete confidence; it is that the water rate is bound to increase. Even in this country, water is no longer a commodity that we can afford to waste, and that is one reason why I think it should he metered. In my own country—and I have not gone into details—the water engineer said that one of the main reasons why he would like to see all property metered was to try to avoid wastage. Time and time again, he said, people are paying higher prices for water because there are those who simply do not bother to repair a leak or who allow their taps to drip and cannot be bothered to put on a new washer. Wherever I have known of a meter actually having been installed, the occupiers have, at the end of the day, saved money because they have had a refund of the difference between the water rate based charge and the metered charge.

It is to avoid this wastage, to make people realise that water is no longer a completely expendable commodity, that meters should be installed. From all the information that I have gathered there has never been a case where I felt that because of metering the hygiene of the family has suffered. Certainly there are cases where too much water can be used, as in watering gardens, washing cars, installing swimming pools and all those luxuries. But should it so happen that metering became a high charge we have already in legislation (whether passing or having passed) provisions allowing rent and rate rebate. People could get relief from high water charges in the same way. I feel that this country should seriously consider installing meters.

Before the noble Earl sits down, if his argument is correct, can he explain why one authority, Malvern, which for a very long time, since 1878, has metered—it has now gone into the South West Worcestershire Water Board area—are proposing to abandon metering in favour of the rating system?

THE EARL OF BALFOUR

I must admit that my experiences have been in
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Scotland. There in quite a number of places they have installed meters resulting in a remarkable saving in water and a saving in expense for the user. That is all I can speak of.

The noble Earl said that we cannot afford to waste water. Neither can we afford not to use it. It required a tremendous campaign to persuade people that it was desirable that they should wash their hands after having been to the toilet. I can remember one experience in my life—I was in a position I had not sought—when I was in hospital in Italy during the war, suffering from acute enteritis. The day was largely taken up by drearily walking to and from the toilet. At one point, I was asked, "Are you washing your hands after having been to the toilet?". I was told to stop it because it was a use of water that could not be afforded. I must say that I felt extremely uneasy in my mind about that, because I had learned the lesson that it was desirable that one should wash one's hands. I hope I am not doing the noble Earl an injustice, but I think (I may be wrong) that he is forgetting that among those with the most modest incomes will be people with young children. We ought to do nothing that would discourage them from using all the water needed to keep those children clean and to bring them up with good habits.

I noticed when my noble friend was talking about Malvern's intention to give up metering that the noble Viscount indicated dissent. I am not going to enter into an argument as to whether they are going to give it up or not; but I am interested in what Mr. Phillips, the engineering manager of the South-West Worcestershire Water Board, had to say about the cost of metering. From his experience in Malvern he gave it as £2.20 a year, made up as follows: 62p for reading and billing, 48.3p for maintenance and £1.10 for service charges. I do not think that it is going to be easy to justify adding that £2.20 a year to the cost of supplying water. Whatever is said about rateable values for use as a basis, it is without question as cheap and as easy a way of doing it as can be devised.

If we need to give thought to reducing consumption of water—I do not know
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how it can be done but it is about time somebody gave mind to dealing with it —let us consider the problem of using a gallon of water to get rid of a pint of urine. If some effective thought could be given to that matter it could result in a very substantial reduction in the quantities of water used in that connection. Mr. Phillips further stated that if every house in England and Wales had a meter cost would amount to over £33½ million a year. His figures may be inaccurate. I do not know; I accept them at face value. But if they are incorrect I hope that we shall be told what are the correct figures. It seems to me that here we have someone whom we can regard as an authority. I think we ought to know exactly how much water the Government think ought to be saved. We ought to know whether adequate thought has been given to other methods of reducing consumption and avoiding unnecessary waste. People who use water and pay for it, however much they use as domestic consumers, will be extremely unhappy if, for no good reason, £2.20 is to be added to the annual cost. I hope, despite any blandishments about this not being done immediately, and being done slowly over a long period. we shall make clear to the Government that we do not intend to support a tax on cleanliness.

I hope that when he replies my noble friend will deal with the point raised by the noble Baroness, Lady White, with regard to the significance of Clause 29(2) which appears permissive rather than mandatory, as I think she would wish and as I would wish. Obviously, this is an important aspect. If at any time in the future there should be a scheme for introducing meters the Minister must be responsible for its introduction and for its submission to Parliament before it is introduced. I would subscribe to the general view, expressed particularly by noble Lords on the other side of the Committee, that this would be a major act of principle.

I am not persuaded that hygiene is in peril. My noble friend Lord Courtown dealt effectively with that when he told us that although he is metered, his normal usages of water never bring him to the point where he would have to pay more than the minimum charge; which emphasises the point made by noble Lords
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opposite that this is probably a long way off. I suppose the justification for putting in this provision is that this Bill is a comprehensive piece of legislation designed to try to set up a modern water industry capable of making the best use of our water resources and ensuring that we shall in the future have a sufficient supply of high quality water. I should have thought that in that context it would be difficult to argue against the possibility of installing meters for domestic purposes some time in the future. The kind of uses that I think one would be particularly concerned with for domestic purposes are not normal usages but, again as my noble friend Lord Courtown said, extravagent uses—in the garden and for washing motor cars which in many cases is done from the domestic supply; and, of course, leakages, where a tap washer is worn and it is an awkward job to replace it and is something that the consumer cannot do himself. There is also the deplorable practice with a tap which is located over a sink in an unheated room, when in cold winter weather it is allowed to run all night to make sure that it does not freeze. There are all kinds of extravagances which run away with large quantities of water, and they pinpoint the sort of economies against which no one could argue.

I should have thought, therefore, that in principle the idea of meters is right. I ask the Committee to consider the experience with the electricity tariffs over the last 15 years, and particularly over the last decade. Deep thought and great ingenuity has been applied to devising and constructing scientific tariffs. They have had a revolutionary effect on the consumption of electricity and on the development of appliances with enormous benefit to the economy of the country and to individual consumers. Such simple devices as the night storage heater are a direct result of a more sophisticated tariff. I would think it not beyond the bounds of human ingenuity that within the next decade or two—I agree it is a fairly long time-scale for water—and as water costs rise, as undoubtedly they will, it could be worth while installing meters for domestic purposes; and giving some thought about how to construct them in a way which would give an incentive to the individual consumer to make the best use of water.

When strong political feelings are aroused, and quite rightly, about the
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importance of the hygiene aspect, do not let us forget the strong emotional feelings that arise regarding the making of new reservoirs. The noble Baroness, Lady White, will not be unconscious of that factor in the Principality. There will be strong felings about some of the big new hydrological schemes that we shall have to face over the next decade or two, and we must try to look at this objectively. The time will come, as water becomes more scarce and expensive, when we shall have to put our minds to seeing how we can use it most economically and with the greatest benefit for the whole of the community. It could be that then domestic metering would be justified. This is the perspective in which I see the matter, and I await with interest what my noble friend will have to say.

I think that all this will be some way off but it would be interesting to see more experiments carried out. I have an idea that Milton Keynes will be metered. If it is not, I think that some new town should be, so that we may begin to learn something about the technical problems and, when the day comes—perhaps in a good many years' time—when it would be worth while considering a more general introduction of metering, we should have a great deal more information about the pros and cons of the problems involved. At the present time it would, in my opinion, be absolute lunacy to spend £500 million on installing meters in every house. But as new houses are built, and especially new towns and large blocks of new development, would not it be worthwhile putting in meters against the day when we might need a more general scheme of metering? In this context I feel that this is an idea in principle which the Committee should look at objectively and, provided that my noble friend can give us a desirable assurance on Clause 29(2), I should have thought that this is something we ought approve.

I hope that noble Lords on this side of the Committee will
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not be blamed if later business is not taken.

VISCOUNT COLVILLE OF CULROSS

I shall not blame them. I do not know whether anybody else will; but I think this matter is important enough to risk that hazard. My noble friend Lord Nugent of Guildford, has put the perspective on this in exactly the same way as I would have tried to do, and I very much agree with him. I do not think that anyone in the Committee misunderstands the way this is being put by the Government. It is set out in the Consultation Paper. I do not think that anyone supposes that what we are intending is that there should be a universal introduction of domestic metering overnight. First, I agree that we do not know enough about it and, secondly, it would be prohibitively expensive and could not be justified. That is not the point of Clause 29 at all, and I am pretty certain that the Committee has taken this in already and do not need me to say it again.

We are trying to take what I think my noble friend Lord Nugent of Guildford suggested was some sort of a comprehensive, rather more farsighted look at a future piece of legislation containing powers. We shall not expect instant results on this but we shall expect, I think, that the National Water Council and the water authorities will wish to study in depth and over a period of time the costs and benefits of installing meters—possibly only in parts of their areas—and compare this with other methods of spending capital on conserving water. In answer to the noble Lord, Lord Garnsworthy, there is no suggestion that this sort of project is in any way an alternative to looking at other methods of saving water. Very far from it! The Government are just as interested in all methods of saving water; and certainly this is not intended to take priority over the other steps he mentioned.

I think that there has been a certain amount of misunderstanding about what the Central Advisory Water Committee said in 1963. The noble Baroness, Lady White, said that that Committee recommended against domestic metering. Let me remind your Lordships what the Committee in fact said:
Metering of all water supplies, including domestic water supplies, would be the fairest
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method of charging and the only method which could ensure a measure of economy in the quantity used.
Where the Committee jibbed was on the comparative costs. What they said was:
Our information suggests that it would cost about £2 a year to meet capital and running costs of each meter supplied apart from the costs of providing the water. That is more than many householders pay at the present time for their water supply.
Then after reviewing experience abroad, they said:
We have therefore concluded that we should not be justified in recommending the universal metering of supplies. This conclusion would merit review if the cost of water were to rise greatly or there were significant increases in water consumption.
Now the cost of water has risen significantly and there have been significant increases in consumption. In 1962, when they were collecting their information, a typical charge for water by volume was 12½p a thousand gallons. Last year a typical charge was 20p per thousand, though not in Eastbourne. In 1962, consumption for domestic purposes was 1,450 million gallons a day and in 1971 it was 1,950 million gallons a day. Last year a typical water rate amounted to £10 a house—that is a sort of medium figure—which is four and a half times that figure from Mr. Phillips's report, the £2.20 of the cost of the meter. That is a very different situation from that existing in 1962 when the figures were being collected by the Advisory Council, and one has to remember that under the scheme in this Bill one is not necessarily putting in a meter only for the purposes of measuring the inflow into the house but also to measure the consequential outflow into the sewerage system. Perhaps the noble Baroness will let me finish this because it is extremely complicated.

In that case I am sorry; I shall have to go back and repeat what I said about the justification for the Central Advisory Committee not recommending in 1962 that metering for domestic purposes was "on". I am saying that in those days they said that it would cost about £2 a year, capital and income, to run a meter and they compared it with the average cost, or a reasonable, ordinary cost, for the whole of the domestic supply under the domestic system. They said that that is more than many people pay in total for the cost of their metering supply. There is a comparison therefore between the cost of the water under the ordinary domestic system and the costs that would be involved if meters were installed. They said that in those days meters would be more expensive in total than the whole of the prices paid for domestic water now. I am saying that today the situation would be that the cost of the water is likely to be four and a half times the cost of the metering. The cost of the water, as it is now under the domestic system, would be about four and a half times the cost of metering, and I was—

I am sorry to interrupt, but the noble Viscount seems to be assuming that the cost of the meters and the cost of servicing them will remain exactly as they were in 1962, although prices generally have increased.

VISCOUNT COLVILLE OF CULROSS

I am going on the figures that I have been given by the Department. I am
perfectly prepared to be corrected. It happens that the figures coincide with those given by the noble Lord, Lord Garnsworthy, but if I am told that they are wrong subsequently, I shall of course accept that this is so. I am going on the information that I have and perhaps, with the greatest respect, I may be allowed to finish the logic of this passage in my speech. I am saying that on the water side alone, the comparison is four and a half times (for water itself) the cost of the metering. Add to that that the meter is also available to measure the sewage output from the house; and when one takes account of the charge that is likely to be paid by the householder for both of these services—that is, for the combined water service to
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provide the water and the sewerage service to take it away—the cost of that service is likely to be six or seven times the cost of the ordinary metering charge. All I am saying at the moment is that on the criteria that were laid down for the rejection of domestic metering in 1963 by the Advisory Committee, the situation now meets the criteria where they say it would be a sensible thing to do. That is all I am saying and I am explaining why, on the figures, this is so.

But that is not really all. The view that they expressed on fairness genuinely gains some support from the representations that one receives from the public. People say—and I have heard this said at inquiries, and the experience of the Department is that it is frequently said—that perhaps elderly people living alone can see absolutely no justice in their being obliged to pay the same amount for their water on the basis of rateable value as does the family next door—a family with lots of small children, a washing machine, a dish-washer, a waste disposal unit on the sink—and other large users of water in terms of domestic equipment; not to speak of the car owners, unless of course they are people who do so on a proper charge.

In these circumstances, we consider that the new water authorities, which will be large and responsible bodies, should be enabled to think about introducing metering of domestic supplies when and where the circumstances justify it. We have already said that they would have a majority of local authority representation so that they will, I hope, be attuned to the feelings of the constituents of those local authority members. Nor, as I think the noble Lord, Lord Douglas of Barloch, suggested, will they be doing this totally unco-ordinated from the centre. One of the things we should do is to seek guidance from the National Water Council in suggesting how and when any introduction of domestic metering should take place; we should look for criteria which would justify it. All this is subject, if necessary, to the powers of direction from my right honourable friend—about which a good deal has been said this afternoon. The purpose of the clause is merely to give this form of discretion—no more and no less and we would suggest that to do so in the terms of the Bill is a
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perfectly reasonable and acceptable thing to do.

Now I should like to move on to some of the detailed points that were made. First of all, there is this question of charge. The noble Lord, Lord Douglas of Barloch, mentioned it; the noble Lord, Lord Platt, mentioned it; the noble Lord, Lord Garnsworthy, mentioned it, and it was described by him as a tax on cleanliness. It would be lunatic of any Government to suggest a measure which got people into the situation where they had to economise to that extent. It is not the case, because my noble friend Lord Courtown has already explained how this happens. You do not charge for every single gallon from nought to however much it may be; you have a fairly high minimum amount which people can draw on freely and, as my noble friend said—and I did not know that there was metering in Beaconsfield—

My noble friend is remarkably economical, but I am perfectly certain that he and his family are also very clean. There is this perfectly simple method of having a minimum amount which is free through the meter before any charge starts. With respect to the noble Lord, Lord Douglas of Barloch, I think this deals largely with the question of lead because it allows the water in the pipes to be run off, even though the Department of the Environment, in conjunction with the Chief Medical Officer of the D.H.S.S. did conduct a survey on this subject about three years ago and found very few cases where remedial action was required, but I take the point. If it is required, then of course one should have enough water to be able to run it off. It would be perfectly possible to do this and there is no question of a hazard to health, a tax on cleanliness, lead poisoning or any of these things inherent in the scheme.

My noble friend Lord Sinclair of Cleeve (and I think also the noble Baroness) talked about this being rationing by the purse or some argument of that sort; but I do not think that this is really the point. Having given people a minimum amount which they can have free, we then want to see whether, as the
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standard of living increases and more automatic water-using machinery is installed in the home and garden, and for washing the car and so on, a great deal more water is used. Consumers would at least be aware that there is some point in seeing that the equipment they choose, among other things, uses as little water as possible. There is no point in having a washing machine which is wasteful of water, and there should be some incentive to manufacturers, and indeed to the makers of lavatory cisterns —and I take Lord Garnsworthy's point to try to produce appliances which use as little water as possible although doing their job perfectly satisfactorily. This is the sort of area—and this is probably the point which my noble friend Lord Nugent of Guildford had in mind—where we should like to encourage the development and the inventiveness of people in the market for this sort of thing. The fact of the matter is that unmetered supplies—that is to say mainly domestic users, though there are a certain number of offices—now account for nearly two-thirds of the total water supplied by public water undertakings, and therefore even a small percentage increase in the saving or small decrease in the rate of use would be valuable.

In the face of all this we are asking for these experimental powers. The noble Baroness, Lady White, cannot, I think, have the argument both ways. She said, and quite rightly, that we do not really know enough about it at the moment. In fact, my information is that Malvern is not in fact abandoning meters. I speak subject to correction, but I understood when I was discussing this yesterday that we are studying the situation in Malvern to see what we can learn from it. The Amendment (not the one before the Committee now, but No. 72A) would prevent us from having any further experiments so that we continue to be subject to the charge; we do not know enough about it, or we introduce legislation to allow us to have experiments to cure the fact that we do not know enough about it. This is a vicious circle, but I should have thought the sensible solution could be found under the aegis of central Government, the National Waiter Council, and large responsible water authorities. That is the case for the main provision in this Bill—experimental as I put it.

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May I come on for a moment to the Amendment that is before the Committee—the Statutory Instrument machinery whereby one could control the introduction of domestic metering. Various noble Lords asked about the regulations under Clause 29(2), and it is worth looking at this clause because it is rather wider than has been thought. We want this power, not immediately in order to deal with domestic metering, but in any event to deal with ordinary meters which are installed already on industrial premises. The Committee will see that:
The Secretary of State may by regulations make provision with respect to the installation of meters, whether under this section or otherwise …
We want powers, which extend at the moment to the gas and electricity legislation, to allow rationalisation of existing codes of metering applicable, if nowhere else, in industry. One thing is quite certain; that is, that if domestic metering were to be introduced my right honourable friend would make regulations for domestic metering first and not allow it to be done afterwards.

We then come to the second statutory check that the noble Baroness wanted to introduce, and here I must, if I may, ask her whether she could tell me exactly how she would like to see this work. Although we cannot finalise this to-day, I think there has been a certain amount of confusion about what would be involved. The noble Barones is asking that a scheme which dealt with or included domestic metering should be subject to the Negative Resolution procedure. If we get to the stage of having domestic metering we shall be getting to that stage in the context where we rather anticipate that a charging scheme will be put forward by each regional water authority every year. Therefore, we have to look forward to the situation that if we have the Negative Resolution procedure we should have in an area where this is being tried, an annual Statutory Instrument; and if the trial was being extended from one part of the area to another we should have a Statutory Instrument which would have to be examined, or be susceptible of being examined, by Parliament area by area—the previous area involved and the new area also being looked at.

If all the ten regional water authorities started to introduce these schemes, do
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we really want ten Orders or Statutory Instruments which have to be looked at by a Special Orders Committee and Committees in another place every year? Do we want to reopen provisions which have been passed in previous years? Do we really have a case for Parliamentary examination of these things? Have we not also to take account of the fact that if there was Parliamentary procedure of this sort it would inevitably hold up the whole process of making the charging scheme; or, at any rate, we should have to bring it forward in the year in order to make it operative in time, so that the figures would be more speculative at the time when the Order was put forward than would otherwise be the case?

One noble Lord (I think the noble Lord, Lord Champion) has already made the point about delays and how difficult it is when you do not get the timing of your finances right. The inevitable delay involved in a Statutory Instrument of this sort would mean the advancement of the preparation of the scheme, rather than what we were talking about, retardation, and it would mean that we should have less accurate figures to go on. I put these points forward because I suspect that the Committee had not realised that the charging schemes are likely to be annual affairs in every regional water authority area, so the danger is that we shall have a batch of these orders every year. With the greatest respect, I do not think that, with the sort of safeguards that are involved in the three areas the power of direction of the final ultimate end, the adoption and promulgation of criteria by the National Water Council, and the responsible character of the regional water authorities themselves, subject to all those appeals and checks that I explained earlier—an extra Parliamentary stage is necessary. That I must, however, leave to the judgment of the Committee, although I would do so on the realisation that it is not just a fairly small number, or a once-and-for-all exercise, but is likely to be an annual event.

The Amendment immediately before the Committee is on this machinery point. I hope that I have also answered the debate on the major issue as well, and if it does go to an expression of opinion on this question, I hope the Committee will be satisfied, whether or not they want something in regard to the machinery dealt with in this Amendment, that
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on the major case in order to make progress we must have this purely permissive power to experiment slowly in this field and to make any progress we can. The dangers that noble Lords have pointed out do not stand up to scrutiny. This is a sensible and good provision to have in the Bill and one that stands up to the criteria set out in the Central Advisory Water Committee's recommendation of 1963.

I do not wish to pursue the argument but merely to make one point on the question of costs, to get the figures in perspective. I should like to confirm that in the one representative supply area where I know the facts the average cost per household, for the water bill is £10 per annum, which accords closely with one of the figures used. The estimate by the Central Water Advisory Committee in 1963 of the capital and running costs of the meters was £2, and unquestionably it would be considerably more to-day than it was then, as the interesting report of the D.T.I. on meters clearly shows.

VISCOUNT COLVILLE OF CULROSS

I was quoting figures which my honourable friend the Minister sent in a letter earlier this month to Mr. Nigel Spearing, the honourable Member for one of the Acton constituencies, and I have taken the figures of four and a half times (which is the difference between £2 and £10) from what my honourable friend said. I do not know truthfully where that information came from, but if my honourable friend put it in a letter I think I may at least rely on it as being fairly authoritative. It may be that it is some sort of average. I take the point. If noble Lords rebuke me on the figure then I must stand rebuked, but I take it from what I think is a good source.

I of course accept that the noble Viscount has taken the figure from the letter sent by his honourable friend to an honourable Member in the other place. All I would say is that it is difficult to accept that there has been no substantial increase in the cost of installing and servicing meters between 1963 and now, and therefore the figure used must surely be open to question. I appreciate that the figure mentioned by
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my noble friend Lord Gamsworthy, in quoting Mr. Phillips of the South-West Worcestershire Board, is of that order of magnitude. On the other hand, the meters have been installed in Malvern for about a century and therefore they do not take into account the servicing and the cost of installing meters in the future. I think it is somewhat open to question whether the total cost is as the noble Viscount suggests.

VISCOUNT COLVILLE OF CULROSS

I have just had a carrier pigeon which confirms £2.20 as being the cost of metering produced by the South-West Worcestershire Water Board on the Malvern experiment last year. That is as far as I can take it. I just confirm from the Department that the noble Lord, Lord Garnsworthy, is right.

Quite so; but the point I am making is that Malvern has had this system for a hundred years, and this does really give you the cost of starting ab initio in other places where the modem cost off installing a meter must be considerably higher than if it had been in situ for a hundred years, or some such period. It includes an element of service charge, as I am reminded, but surely the service charge must be lower if you put in your meters at low cost a long time ago. However, I do not think we can battle further on that, although I think it alters the balance of the argument somewhat.

If I may revert to the Amendment that is before us, I do not feel at all happy about the reply that we have so far received from the noble Viscount on this point. As the noble Lord, Lord Nugent of Guildford, emphasised, what is worrying us is Clause 29(2). The noble Viscount said, as I understood him, that if domestic metering were to be established the Secretary of State would make regulations to cover it. But we have no guarantee in the Bill that this is to be so. There is nothing in Clause 29(2) that says he shall do this. It is for this reason that we put down this procedural Amendment. I admit that in putting my name to this Amendment I had not fully realised that this would be an annual event, and I understand the noble Viscount's Parliamentary problems in that regard. I do not think that this is a situation that we had contemplated. But
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surely the answer is that he should give us a guarantee that he will look again at Clause 29(2) in the light of the plea made by the noble Lords, Lord Nugent and Lord Sinclair, and by my noble friends. It is not satisfactory as it stands. I do not want to delay too long on this, but on this machinery point I would ask that the noble Viscount should give us a guarantee that he will look at it again. I can see his objections to our Amendment, but surely he will see the cause of our apprehensions about the vagueness of the Bill as it stands.

VISCOUNT COLVILLE OF CULROSS

What is new to me on this machinery point is the emphasis that has been laid on the relationship between Clause 29(2) regulations and the sort of machinery the noble Baroness has in her Amendment. I think I am quite safe in saying that we should like to look at this again: I certainly should like to look at it myself, and I strongly suspect that my colleagues would as well. As to this machinery, I think we should have another look at it. I cannot promise what the result will be because there are practical difficulties in devising how it should be done.

I am grateful to the noble Viscount. I think it is only right that he should try to meet us on this matter. On the machinery point, therefore, I hope I have the consent of other noble Lords whose names are down to this Amendment to ask leave to withdraw it. Before I ask leave, however, may I say that I remain unconvinced on the main point; therefore, when we come to Amendment No. 72A I would ask noble Lords to support us. In the meantime, I ask leave to withdraw this Amendment.

§VISCOUNT COLVILLE OF CULROSS moved Amendment No. 69:
Page 34, line 3, after ("therefrom") insert ("(whether or not the charges are payable by reference to any other factors)").

§
The noble Viscount said: Whatever one thinks of metering in general, I hope
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that this is an acceptable Amendment. It is intended to make it clear that meters may be installed in premises to measure the volume of water supplied or effluent discharged where, first, the actual charge is assessed by reference to volume; and secondly, the charge is assessed by reference to volume and other factors. For example, the water authorities may want to make minimum or standing charges for water supplies because of the need, whatever the volume actually consumed and metered, to provide adequate sources and distribution networks. They may want to introduce tariffs which would incorporate an entitlement to a supply of water sufficient for basic public health needs on payment of a standing charge, perhaps related to the rateable value of premises, with quantities supplied in excess of that amount being charged for by reference to volume. The present Amendment will allow them to do these things. They are in fact exactly the points that I was making on the health side, and I think we should make it prefectly plain in the Bill that this would be allowable for domestic meters where installed. I beg to move.

§VISCOUNT COLVILLE OF CULROSS moved Amendment No. 71:
Page 34, line 23, leave out ("and ascertaining therefrom") and insert (", together with any ancillary fittings and associated works, and ascertaining from any such meter").

§
The noble Viscount said: I think I can discuss this Amendment with Amendment No. 72. No. 71 enables an authorised officer of the water authority to go into premises to inspect any meters used for measuring the volume of water supplied or effluent discharged, and any ancillary fittings and works. Amendment No. 72, removes the present way of putting it, whereby someone can go in to inspect fittings and works used in connection with the supply of water or the discharge of effluent. The change has come from discussions with the C.B.I., who thought that the Bill as it stands gives too wide a right of entry to the officers of water authorities to inspect fittings and works and in fact generally to poke around and inspect things which they do not need to inspect. Although this may be a
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slightly exaggerated fear, because there are penalties for disclosure of information, we felt that we should tighten up this subsection so that the inspection of meters and ancillary matters would be free of the disagreeable suspicion that trade secrets and other things would be able to be looked at by these inspectors. We hope therefore that an improvement will be effected by these Amendments. I beg to move Amendment No. 71.

§
Page 35, line 31, at end insert—
("premises" in relation to water supplied thereto does not include premises or any part thereof in respect of which water is supplied for domestic purposes only").—(Lord Garnsworthy.)

I confess that I have not read the Bill as carefully as I should have done. I wonder whether the noble Viscount could clear up one point: does water for domestic use include water for the garden? If not, is there going to be an extra charge for that, particularly if one uses a hose in the garden?

VISCOUNT COLVILLE OF CULROSS

It depends according to the rules and Statutory Instruments governing any particular water undertaking. But the normal arrangement would be that a user is charged for his domestic supply on rateable value. If you have a hose for watering the garden, or if you wash your car, you are required to tell that to the undertaking, and there is an extra standing charge. There is no other way of measuring the amount used. If you had domestic metering, I imagine that it would all go through the meter and the amount used would be paid for according to amount rather than according to the standing charge.

§
Page 36, line 2, leave out paragraph (f) and insert—
("(f) all statutory water undertakers existing immediately before the passing of this Act, except statutory water companies, joint water boards, joint water committees and existing local authorities and other bodies exercising functions not affected by this Act.")

§
The noble Baroness said: This is an important drafting Amendment which defines more accurately the bodies in the field of water supply which are to be abolished by Clause 30 of the Bill. Those will be all statutory water undertakers existing immediately before the passing of the Act, with certain specified exceptions. These are, first, statutory water companies, because these will continue to supply water on behalf of water authorities under Clause 11 of the Bill; secondly, the joint water boards and joint water committees, because these terms are used in the narrow sense given to them by Clause 35 of the Bill—that is
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to say, joint boards and committees constituted under Section 9 of the Water Act 1945 on which a statutory water company is represented. The three bodies which fall within this description are all concerned solely with bulk supply and will continue in existence as joint ventures between statutory water companies, or between a statutory water company and a water authority.

§
The third exception is existing local authorities and other bodies exercising functions not affected by this Act, because these bodies will need to remain in existence for the purposes of their other functions. They will, however, cease to be statutory water undertakers by virtue of Clause 10(5) of the Bill. I should like to make it clear that the joint boards excepted from abolition by the Amendment are not the joint boards supplying water to consumers but joint water boards as defined in Clause 35. I beg to move.

§
Page 36, line 30, at end insert—
("(3) An order under section 2(5) above altering the boundaries of a water authority area and an order under section (Discharge of recreation and amenity functions in and around Greater London) of this Act may include the like provision in relation to the order as may be made by regulations of general application under section 67 of the 1972 Act by virtue of subsection (2) of the latter section.")

§
The noble Baroness said: I beg to move Amendment No. 73A. The orders referred to in this Amendment are those under Clause 2(5) altering the boundaries of a water authority area, and those made under the new clause providing for the Greater London Council to have recreation and amenity functions in and around London. The effect of the Amendment is to put such orders on the same basis as orders under Part IV of the Local Government Act 1972, altering the areas of local authorities. It means that they may include a number of provisions for the transfer and management of custody of property and the transfer of rights and liabilities; the functions or areas of jurisdiction of any public body and, the transfer of legal proceedings.

§
They may apply, with or without modifications or extend, exclude or amend, or repeal or revoke, with or without savings. any provision of an Act, an instrument made under an Act, or a charter. This Amendment is included because at the Committee stage in another place there was some controversy over the provision originally included in Clause 2(6) of the Bill for making consequential modifications in other parts of the Bill. Objection was also raised to the fact that orders under Clause 2, and more particularly orders altering the boundaries of a water authority's area, were not invariably subject to Parliamentary procedure.

§
My honourable friend indicated in another place that it was not possible to deal with this matter by Report stage but he moved an Amendment to delete the words in Clause 2(6) to which exception had been taken. The present Amendment and Government Amendment No. 86B, to be moved later, complete the process so far as orders altering boundaries are concerned. The present Amendment specifies what may be included in such orders, while Amendment No. 86B subjects them to either Special Parliamentary Procedure or Negative Resolution procedure. Similar provision is made for the new clause providing for the Greater London Council to exercise recreation and amenity functions in and around London. These orders have therefore been included in the present Amendment. I beg to move.

§
".—(1) There shall continue to be a river and water authority for the Isle of Wight to be known as the Isle of Wight Water Authority.

§
>(2) The Secretary of State may make an order providing for the constitution of the
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Isle of Wight Water Authority and otherwise for regulating the application of this Act to the Isle of Wight and may on the application of the Authority make an order providing for the exercise and performance there of any functions which are by the Act conferred or imposed on regional water authorities.

§
The noble Earl said: I beg to move Amendment No. 74. I ask the Committee to consider for one brief moment the special case of the treatment of the Isle of Wight under this Bill. Unlike any other area within the Bill, the Isle of Wight is the only substantial island within the new regional water authorities. It has a population of 105,000 which, with the summer visitors, rises to 250,000. Four miles of open sea, the Solent, separate it at the nearest point from the mainland.

§
The purpose of this Amendment is very simple: it is to seek recognition within the Bill that the Isle of Wight is in a unique situation, and to seek for some formula that should be capable of being written into the Bill to the effect that the Isle of Wight should be granted its own authority, albeit a sub-authority, under the Southern Water Authority. The Committee may ask what grounds the Isle of Wight has to argue this case. I suggest the case is very strong indeed. I put forward three grounds. First, there is no major island within the Bill linked to the mainland regional water authorities. If one looks at Clause 32 one sees that the Isles of Scilly have specifically been dealt with separately. The second point is that the island has no physical link either by bridge or tunnel, or indeed a water pump. Only the electricity, telephone cables and gas pipes have any link at all with the island and the mainland. It relies on not one pint of water from the mainland supply. I am assured by the island's present authority that, with the current capital programme in hand of about £1 million to
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produce some 3 million gallons of water a day in the next three to four years, no assistance is foreseeable up to 2000 A.D. or beyond.

§
The third reason—and this is a substantial reason, again—is that the island's case has been recognised by Parliament in recent years in no fewer than two cases. The Committee will, I am sure, remember in 1972 the Local Government Bill which as originally drafted proposed that the Isle of Wight should join with Hampshire. Indeed, it was only at a late stage, in fact in this House, that the Government agreed to recognise the island as a separate local authority. The second case was the Water Resources Bill of 1963. When it was originally drafted it included the Isle of Wight with Hampshire. Again, the Government had second thoughts on the matter and the provision was withdrawn from the Bill and a Private Member's Bill was introduced the year following setting up the present Island of Wight River Authority. If one traces what this authority has achieved since 1964, one sees it has achieved a great deal of success for the island. It has provided the island with an excellent water supply—and, as I have said, for a population that varies from 100,000 to 250,000 in a year. Secondly, it has prudently built up a reserve fund from revenue and, as has already been said, has a capital programme in hand for improvements of its water supply. Thirdly, it has a good record on its sea defences, on its fisheries, and its drainage. The tidal waters are generally, I am told, considered of a high standard. Fourthly—and this is imnortant—it operates with the closest liaison with the planning authorities, particularly on recreational pursuits.

§
When the Bill was published a number of people felt that the Isle of Wight should be recognised as a separate authority, perhaps the eleventh authority under this Bill. There are others, including myself, who would not wish to go so far. One would see particularly problems such as the pollution of the Solent as a particular joint problem which at present lies between the Isle of Wight and Hampshire and which clearly should be the responsibility of a larger authority—and no doubt the Southern Water Authority. In expressing this view I believe one is expressing,
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and I hope fairly, the view of the present Isle of Wight authority on this, and indeed of their Member of Parliament. What is being pressed now is that the Isle of Wight should be recognised as a unique situation. It has the existing authority which has worked well, and one hopes it could become a sub-authority within the Southern Water Authority; that it could be written into the Bill, with delegated powers to handle the water supply and the rivers.

§
I should not be surprised if my noble friend advised us later that this Amendment in its present form was not acceptable, because one has already heard from other quarters that the Amendment could hybridise the Bill. The advice I have been given disagrees with this. One also has heard that the Isle of Wight should rely perhaps on Clause 6 of the Bill, under which the regional authorities may set up advisory and executive committees. The authorities have studied this clause with a great deal of care and I believe are of the view that it is unsatisfactory in the case of the Isle of Wight. The reason they are unhappy about it is that there is an overriding argument, which one fully supports, that each new regional authority will be entirely free to set up its own committees, executive or advisory, and it would be entirely at the discretion of the new authority as to what powers these committees will have. The fear is—and it is a very real fear—that the committees that could be set up in the case of the Isle of Wight would be more of an advisory nature than executive.

§
Without, I hope, overstating the case I would call upon my noble friend for some sympathy for this Amendment and I hope she will be able to give it. The Isle of Wight should under this Bill receive the same treatment as it received in the case of the Local Government Act. That was to give it its own destiny in local government. It would seem an odd quirk of fate that it should be given its own local government powers and yet be denied water supply powers, powers which it has had since 1964, specifically given by Parliament, in respect of a duty which it has satisfactorily carried out. I hope that my noble friend will feel able to accept the principle of this Amendment, even if the drafting is not acceptable. I believe the case is strong, and I beg to move.

I should like to support very strongly indeed the Amendment of my noble friend Lord Kinnoull. I should perhaps, to avoid any comeback, declare what might be called an interest, although to use the expression in the sense that your Lordships are aware of goes rather wide. I happen to be a member of the Hampshire River Authority. My noble friend has really said all that I wanted to say, but may I recapitulate three points? This is the third time in the last three years that the special position of the Isle of Wight has come before your Lordships' House. The first occasion was when it was proposed to amalgamate the Isle of Wight with the Hampshire River Authority. After prolonged and exhaustive exertions success was at last achieved in impressing upon the powers-that-be that in between the mainland and the Isle of Wight there was a long margin of sea, a minimum of four miles and I think a maximum of 16 or 17 miles, and that therefore the water table of the Isle of Wight could not be in any way similar to the water table of the mainland.

§
The second occasion came along with the Local Government Bill. It was suggested that the Isle of Wight should be amalgamated with Hampshire. It was then discovered, among many other objections, that to go to each meeting in Winchester, where meetings would obviously be held, an Isle of Wight member would have to spend six hours in travelling. Therefore the Isle of Wight was allowed to be a separate county. We now have the third occasion when the question of the Isle of Wight comes up again. The water table has not changed; the distance has not changed—nothing has changed. I very much hope that the Government will accept the Amendment so ably proposed by my noble friend.

From this side of the Committee (I shall be brief, only a minute) I would say that, having heard the cri de cceur from two noble Lords opposite I should like, when we have a reply, to have it explained why a difference was made between the Isle of Wight and the Scilly Isles. I agree entirely that the water table of the Isle of Wight would be different from that of the mainland. In view of the arguments made by both the noble Lords opposite
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I think they have a strong case. Consequently, if they decided to divide the Committee I should have pleasure in going into the Lobby with them.

I also rise to support this Amendment. I do not want to repeat the argument that has already been made, but there are one or two points which support it. One is that the present authority is dealing with land drainage as well as with water, so only sewerage disposal is left out. It has mainly local government representation in membership. As to sewerage, there is common use of the Solent, it is true, where there is, however, a minimal pollution owing partially to the strong tidal flow. There are few problems of industrial effluent. Cowes and Newport both have new sewage schemes which are being put into operation; they have been approved and are now at the drawing-board stage. It seems to me highly beneficial for the Isle of Wight to have its own authority in close contact with the users.

To make organisations larger does not make them more efficient. There are no economies of scale in this case; the authority would need to have a branch office in the Island and in effect there would be a two-tier organisation which the Government have already said is undesirable. Therefore the common problems with the mainland are small: they are solely concerned with sewage and the Solent. There is nothing in that co-operation which cannot easily be obtained by the joint committee—which is, I understand, consistent with what is proposed for the Humber and the Severn. Finally, in case it is stated that the authority will not be large enough to retain skilled advisers on its strength, I would add that there are a number of consultants available in this field and the authority is already employing some of them.

As the Minister who, on behalf of the Government, moved the Amendments to the Local Government Bill of last year which provided for county status for the Isle of Wight, I think I can fairly claim to have sympathy with their cause. But the position we are dealing with now is rather different and I will set out what the differences are in the eyes of the Government. The Amendment would
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have the Isle of Wight as a separate regional water authority. The Bill would have the Isle of Wight as pant of the Southern Water Authority. The present Isle of Wight authority has the constitution of a river authority and is responsible for water supply. It has no experience of sewage or of sewage disposal: that is the responsibility of the districts on the Island, and the present situation is that between them they have 23 outfalls discharging untreated sewage into the sea and into the Solent. So I think the Committee will agree that very much needs to be done much more than the Island has so far managed to do—and it needs to be done better and more quickly by a much larger authority on whom the cost, which will be very considerable, can be spread over a much wider area.

The Royal Commission on Environmental Pollution has clearly and strongly recommended the establishment, wherever possible, of unified control of estuaries in the interests of pollution control. Your Lordships will remember that this was the first and emphatic Report that came from the Royal Commission on Environmental Pollution. Wherever this can be done it should be done, and it can be done readily in the case of the Solent by the provision incorporated in the Bill at the moment under which the Isle of Wight becomes part of the Southern Water Authority. I would put it to the Committee that the Solent is an estuary in a sense quite different from that in which the space of the Atlantic between the Scilly Islands and Land's End can be considered. It is an entirely different proposition.

May I ask my noble friend why it is so different? Because one is saying that it has no physical contact with the mainland except for the electricity cables, telephone cables and gas mains. What is the difference?

The difference is that where you have 23 outfalls discharging untreated sewage into an area like the Solent, which is only four miles wide at some parts, you have a pollution control problem on your hands which you certainly have not got in the miles of Atlantic between the Scilly Islands and Land's End.

Will the Minister admit that the 23 outfalls are not discharging into the Solent? They are largely discharging into the sea, and the two main ones which are discharging into the Solent—Cowes and Newport—are both putting in new systems at present which are going to treat it properly.

Of course properly treated sewage is not the problem, but the 23 outfalls discharging untreated sewage are a problem. As to the applicability of the arguments used last year when we were considering the Isle of Wight as a potential county for county status under local government reform, there we were dealing with an island which clearly was in a special position. It was in doubt whether it could qualify for county status because its population was 109,000 whereas the next largest was that of Northumberland with 279,000. I think the noble Earl will agree that the increase in that population brought about by summer visitors is not really relevant when one is speaking about the electorate, democratic control and all that sort of thing. But even allowing that the figure does rise to 250,000, we are talking here about an island which is not of the same order but smaller than the smallest unit of local government; a unit which is one-tenth of the size of any other regional water authority. Here we have a complete difference of scale. This would be a tiny authority, one-tenth in size, much smaller in population than the next largest. It really cannot mount the resources or recruit the staff needed to discharge the manifold and complex responsibilities of a modern regional water authority. So the arguments are quite different in this case.

Nevertheless, all the devices for meeting the fears and suspicions of remoteness can be employed. There can be, and undoubtedly there would be, a local office on the Island. The provisions that would make it possible for a local land drainage committee could be invoked and would be appropriate to the argument. There is provision in the Bill for a local fisheries committee; Clause 6 of the Bill empowers water authorities to set up local advisory committees, and all these devices are quickly applied to any of the functions for which they are appropriate. I hope noble Lords on the Committee will appreciate that these provide the best scope for
1291
the devolution of such responsibilities, such as recreation, as the Isle of Wight is undoubtedly fitted to discharge upon the Island, and that we can safely rely on the Southern Water Authority to make full use of in the case of the Isle of Wight, and that really in all the circumstances the provisions in the Bill, adapted in the way I have described, provide the best solution. I hope my noble friend will not feel it necessary to press the Amendment to a Division.

The noble Lord has said that the Island would be too small to make an efficient water authority. I quite understand the arguments he put forth, but the great fact is that it is self-contained. They are not dependent upon the mainland for even a teacupful of water; they supply their own. Would it not be possible, if the noble Lord feels that they are too small to do it efficiently on their own, to make them at least a sub-authority or a branch authority?

I think I explained in my final remarks that there are all sorts of provisions in the Bill for doing just that in respect of a number of different functions. If I may say so to the noble Lord, of course we are concerned in this Bill with much more than water supply. That is only one among eight or nine separate functions. I started my remarks by saying that the Isle of Wight is responsible for water supply and has experience in that field, but for all sorts of other reasons, of which the strongest is to have unified control over the Solent for pollution—and there are many others—it would be better for the Isle of Wight not to part from the new water authority.

I was just wondering whether the residents in the Isle of Wight would not rather have the cost of the sewage disposal units that will be necessary to deal with this sewage spread over the whole of the area into which the Isle of Wight will now go under the Bill. I am bound to say that if I were a resident
1292
of the Isle of Wight I would hope that some people from the mainland would be paying for what clearly ought to be done to clear up the sewage disposal difficulties of the Island itself. Am I right?

On that last point, I beg to differ from my noble friend in saying that the point made by the noble Lord, Lord Champion, is right. The main sewage problem is caused largely by the vast numbers of holiday-makers who come to the Island and who pay no rates whatever to the island. That is the problem of the Island. The point I was trying to make in my earlier remarks, and which the noble Lord did not cover, was that I and other noble Lords asked the Government to consider the Isle of Wight being made a sub-authority with responsibility for water and rivers. I did not specifically mention drainage. It is not mentioned in the Amendment. Therefore I was astonished by my noble friend's point about the lack of experience in sewage or possibly the lack of policy of the local authorities on the Island. I feel that there has been some support for this Amendment. I am always grateful for the support of the noble Lord, Lord Davies of Leek, and indeed for the support of my noble friends who speak with far greater experience than I do. I hope that at this stage my noble friend will give an undertaking that this matter can be looked at again in order to try to insert some furmula in the Bill whereby the Island authorities do not have to rely solely on Clause 6, which as I explained—a point to which my noble friend did not reply—is unsatisfactory to them. I ask my noble friend to consider whether he is prepared to take this matter back for a discussion perhaps before the next stage, in which case I shall be very happy to withdraw the Amendment.

Of course I can give that undertaking. But all the provisions for making the Island in some sense a sub-unit of the Southern Water Authority are already in the Bill. As I have explained, it is not just a question
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of the exercise of the powers under Clause 6. It is the scope for having a local office on the Island; it is the possibility of having a local land drainage committee; and a whole lot of other things, all of which will be not so much for the Government but for the Southern Water Authority to invoke, and I cannot bind them. I should have thought that it stood out a mile that in the case of the Isle of Wight it would be sensible to make full use of this. I can give the assurance that the Southern Water Authority will certainly consider the use of all these powers and the points that noble Lords have been making in support of this Amendment. I hope that my noble friend will see that it will be for them rather than for the Government to decide exactly how they should adopt them.

My noble friend has not gone quite far enough. What I was asking was whether he would give an undertaking to look at this matter again before the next stage. I fully appreciate that it will be as at present written—the responsibility, indeed the decision, of the Southern Water Authority. I am not asking that. I am asking the Government to consider this matter again and to consider the points that I know the Isle of Wight put up in a strong case before this Amendment was moved; that is, to see whether we can come to some formula to meet the principles of the Bill and the wishes and certain principles of the Isle of Wight Authority.

We can certainly look at it again to see whether the framework provided in the Bill is sufficiently flexible to meet the rather special case of the Isle of Wight. I do not think that my noble friend is being reasonable in asking me to commit the Government to working out the formula which is actually to be used.

I am satisfied if my noble friend will look at this matter again. I am not asking for an undertaking that anything will be done. But with that assurance and the welcome last few words from my noble friend, I am happy to withdraw my Amendment.

Amendment No. 74A is a drafting Amendment in the interests of consistency. The Bill speaks elsewhere of water authorities discharging their functions. This Amendment brings this into line. I beg to move.

§BARONESS YOUNG moved Amendment No. 74B:
Page 37, line 35, at end insert ("or any Act replaced by that Act.")

§
The noble Baroness said: This Amendment relates to the definition of the term "development corporation" which at present refers to the New Towns Act 1965. That Act was a consolidation Act and many of the development corporations now in existence were established under the New Towns Act 1946, The effect of the Amendment is to take account of that. I beg to move.

§
Page 38, line 28, leave out ("does not") and insert—
("(a) in relation to a time before 1st April 1974, does not at that time").

§
The noble Baroness said: I beg to move Amendment No. 74G and to take with it Amendment No. 74H. The purpose of both these Amendments is to fulfil an undertaking given in the Committee stage in another place to examine the definition of "London excluded area" as it at present appears in the Bill. The definition of the London excluded area must meet two requirements. First, it must define the London excluded area in terms of river authority areas and the Thames and Lea Catchment areas as they exist at any time between Royal Assent and April I, 1974, for the purpose of identifying the area of the Thames Water I Authority in Schedule I to the Bill; and
1295
it must provide for any alteration of the area of any of these bodies during that interim period. Secondly, it must, for the purpose of providing for the position which will apply after March 31, 1974, define the London excluded area in terms of the areas within which water authorities may exercise their functions. The result will be that any order under Clause 2(5) altering the land drainage area of any of the water authorities which adjoin the London excluded area will automatically effect an equivalent variation of the London excluded area. The definition which has been modified by these two Amendments is I understand acceptable to the Greater London Council. I beg to move.

§
Page 38, line 29, at end insert—
("(b) in relation to a time after 31st March 1974, does not at that time lie, for the purpose of the exercise of land drainage functions, within the area of any water authority;").—(Baroness Young.)

§BARONESS YOUNG moved Amendment No. 74C:
Page 38, line 30, at end insert (""public authority" includes a statutory water company").

§
The noble Baroness said: I beg to move Amendment No. 74C and to take with it Amendments Nos. 86A, 122A and 122C. These Amendments are all related. Their purpose is to entitle statutory water companies to receive notice, in cases where they are concerned, of the Minister's intention to alter the boundaries of a water authority's area (Schedule 2, paragraph 14); of the intention of the Minister or Ministers to make by-laws (Schedule 6, paragraph 2); and of the intention of water authorities, other statutory water undertakers, which includes statutory water companies, and internal drainage boards to make bylaws (Schedule 6, paragraph 13).

I beg to move Amendment No. 74G. This Amendment is concerned with interpretation in Clause
1296
35, and corrects the reference to the Public Health Act 1936 in its meaning of the expression "public sewer". The words "Part II of" are removed by the Amendment, because the expression "public sewer" is used throughout the Act of 1936 and not in Part II only. I beg to move.

§
Page 38, line 40, at end insert:
(""statutory water company" means a company authorised immediately before the passing of this Act by any local statutory provision to supply water or a company in whom the assets of any company so authorised have subsequently become vested.")

§
The noble Baroness said: I beg to move Amendment No. 74D. This Amendment defines the term "statutory water company". The definition has been a company authorised by any local statutory provision to supply water. Following the passing of the present Bill, however, companies will derive their authorisation to supply water not from their local Acts but from their arrangements with the relevant water authority under Clause 11. I beg to move.

I beg to move Amendment No. 74E. This Amendment is consequential on an Amendment made at Report stage in another place which introduced the new Clause 16, the requisition of sewers for domestic purposes. Clause 16 is thereby included in those provisions which come into effect on April 1, 1974.

I beg to move Amendment No. 74F, which is consequential on Amendment No. 63C, which provides for the discharge of recreation and amenity functions in and around Greater London. It means that the new clause will come into effect on April 1, 1974.

§
Amendment moved—
Page 39, line 26, at end insert ("Section (Discharge of recreation and amenity functions in and around Greater London)").(Boroness Young.)

§BARONESS WHITE moved Amendment No. 76A:
Page 41, line 25, leave out from beginning to end of line 27.

§
The noble Baroness said: I have been asked by my noble friend Lord Peddie, who apologises for his inability to be with us this evening, to move this Amendment on his behalf. I do so with some hesitation because I fully appreciate that this particular Amendment is a very important one for the area concerned, and it depends on an evaluation of certain technical matters on which I do not for one moment pretend to be expert.

§
As I understand it, the difficulty has arisen because of the very strong objection taken by the Kent River Authority to the proposed division, contained in the Bill, between the new Thames Water Authority and the new Southern Water Authority. These matters were raised in another place only after representations had been made by the Kent River Authority, who, as I understand it, pointed out the very serious disadvantages of the suggested boundary. I gather that following their representation the Government decided that they had made their case for the North-Western boundary concerned in so far as land drain-
1298
age, which, as I say, embraces sea defence in the Thames Estuary.

§
But they are far from satisfied with the proposed boundary in so far as water resources go, and are very strongly of the opinion that the existing Thames River Authority boundary would be the appropriate one. The reasons given for this are that the Government proposal is superficial, in the proper sense of that word; in other words, it is dealing only with the surface catchment of water and it ignores what is at least as important in this particular part of the country, namely, the underground aquifers. The proposed boundary, if it were carried out, would cut into the chalk aquifer which extends Westwards through North Kent from the Medway. I gather that there would also be a divided authority in other parts of the area where the underground storage of water is also of very great importance indeed for the general water supply.

§
As I said at the outset, I cannot pretend for one moment to be able myself to judge the validity of these objections, but they have been put to me extremely forcefully by my noble friend, supported by extensive documentation. It appears to me from the papers which I have endeavoured to study that there is quite a strong case, that the division as proposed in the Bill and the cutting through of the chalk aquifer does appear to be undesirable, both from the point of view of the actual control of water supply, and also as concerns certain aspects, at any rate, of pollution control. There is a possibility, as I understand it, of salination from the Thames, which needs unified control, and there are other problems of a technical nature, too, which would apparently make it very strongly to be desired that control over this particular source of water should be in the hands of one authority rather than two, and that this should be the Southern Authority.

§
I shall be very glad indeed to know what the Government's considered view is following the representations that I know they have received. I would not myself be able to judge how satisfactory it is, but I think we can get it on the Record, at any rate, and it will then be open to my noble friend at a later stage, if he things it necessary, to take further action or not, as the case may be. He may feel entirely satisfied with the
1299
explanation that the Government may now give. I beg to move.

THE DEPUTY CHAIRMAN OF COMMITTEES

I should point out that if this Amendment is agreed to I cannot call Amendment No. 76C.

I recognise the difficulty that the noble Baroness is in, and I want to do what is most convenient for the Committee. What I propose to do is to answer the noble Baroness rather briefly, but I hope clearly, and undertake to write more extensively to her noble friend Lord Peddie immediately after this Committee, and then leave him, as she suggests, to return to the matter at the Report stage if he is not satisfied, when we could have a much more extensive debate. This is a subject on which the noble Baroness and I and the Committee could have a very extensive debate indeed, but I take her remarks to indicate that this is perhaps not the best moment. Therefore, may I confine myself to saying that the Government believe that there are very strong water supply and sewerage reasons—and we are concerned with much more than that—for having the boundary where the Government have drawn it in the Bill. Nevertheless, we are going to provide—and there is scope in the framework of the Bill to do this—for the existing water supply boundaries to be retained for water supply purposes. I think that that goes quite a long way to meet some of the anxieties of her noble friend.

The problems raised for land drainage can be met by special arrangements provided for in the Bill under Clause 2, where there is provision for initial orders to be included in the setting up of water authorities. My honourable friend has indicated to the authority that it is his intention to provide in that way for the exercise of the land drainage as well as the flood protection functions. That deals with those matters. I would entirely agree with the noble Baroness that there are problems here arising from the fact that the chalk aquifer is divided by these boundaries. Its management requires close co-ordination with water supply operations and also co-operation between the two water authorities concerned.
1300
Once again the Bill is drawn in a way which provides the necessary machinery for that at Clause 6(1), and provided that the water authorities decide to make use of that it will be possible for these functions to be exercised jointly and unified management of the chalk aquifer to be undertaken. I think that that is the way to meet that particular case.

In all the discussions that we have had with the Kent River Authority on this point, the need to shift the point at which the boundary reaches the Thames Estuary has been recognised, and that is the reason for the Amendment, No. 76C, which I shall be moving shortly on behalf of my noble friend. Perhaps if I make that point here it will not be necessary for me to explain it further when we get to that point. I mention it now to illustrate the fact that we have gone over the ground carefully and thoroughly with the authority, and this is a change which we have found it possible and necessary to make.

I do not think that the noble Lord dealt with the other aquifer, the lower greensand aquifer which extends from Bletchingley to Folkestone. Is he able to say a word or two about that?

LORD S.ANDFORD

Not specifically, but I will bear the point in mind when I come to write to Lord Peddie, though clearly what I have already said about the provisions for joint management would apply to this as well as to the other section.

In the circumstances, as we have had both a brief explanation to-night and an undertaking to write in greater detail to my noble friend, I think that it would be appropriate to seek leave to withdraw this Amendment. It has served a useful purpose, and it will enable my noble friend, or any other noble Lords who may be interested, to come back on Report better equipped. I beg leave to withdraw the Amendment.

§LORD SANDFORD moved Amendment No. 81:
Page 44, line 38, leave out from ("maps") to end of line 42 and insert ("to be substituted for the whole or part of the main river map of the authority's area, and containing a statement to that effect specifying the date on which the substitution is to take effect; and the substitution shall take effect in accordance with the statement.")

§
The noble Lord said: On behalf of my noble friend I beg to move Amendment No. 81, and speak at the same time to Amendments Nos. 82 to 86 inclusive. The purpose of the first of these Amendments is to tidy up the drafting of paragraph 9 of Schedule 2. The purpose of the next four Amendments is to clarify the wording of paragraph 11, and the purpose of the last Amendment is to give effect to an undertaking given by my honourable friend the Minister for Local Government and Development at the Committee stage in the House of Commons. The first Amendment makes it clear that new main river maps prepared by the Minister are to be substituted for the old. The next four are designed to set out more clearly the procedure for altering main river maps, and the sixth makes it possible for local authorities to obtain copies of the water authority area maps on payment of a fee agreed between them.

§
Page 45, line 32, at end insert—
("() Any local authority whose area is wholly or partly within a water authority area shall, on application to the water authority be entitled to be furnished with a copy of any of the authority's area maps, on payment of such sum as the local authority and the water authority may agree.").—(Lord Sandford.)

§
Page 46, line 51, at end insert—
("16A. A statutory instrument containing an order altering the boundaries of a water authority area which is not subject to special parliamentary procedure shall be subject to annulment in pursuance of a resolution of either House of Parliament.")

§
The noble Lord said: I beg to move Amendment No. 86B. This Amendment ensures that all Orders altering the boundaries of a water authority area will be subject to Parliamentary scrutiny. The most appropriate form of such scrutiny in relation to a boundary alteration is considered to be Special Parliamentary Procedure, as in the case of the boundaries of water undertakers under the Water Act 1945. Special Parliamentary Procedure involves opportunities for annulment in both Houses and examination by a Joint Select Committee of both Houses, but it is activated only if there is an objector to the Order. The present Amendment ensures that even if there is no objector to an Order it will still be subject to Parliamentary scrutiny in the form of Negative Resolution procedure.

§
The noble Lord said: This is an Amendment to paragraph 9 of Schedule 3 which deals with disqualification for, and re-appointment to, membership of water authorities. Line 20, on page 49, disqualifies a paid officer of a water authority, and my Amendment is an attempt to give the Committee an opportunity to provide for officers of water authorities serving as members of those authorities. One day—perhaps much earlier than many people recognise—we shall be putting employees on boards of management automatically, and as of right. We shall be doing it quite regularly and nobody will be in the least disturbed. We shall be doing it because, if it is done in the right way, it can have very considerable advantages. It seems to me not very long ago that we were arguing the case for the recognition of joint consultative committees, and I think that to-day most of us recognise the tremendous contribution that employees are able to make because of their participation in joint consultative committees. They can be of the greatest assistance in the running of the industries in which they work. It is really not surprising that they should want to be helpful, that they should want to know exactly what is being done or planned and why, because in most instances they invest their very lives in the commercial enterprise in which they serve. It is therefore of the greatest significance to them that the enterprise should be successful.

§
I have no wish to labour the case this evening, but I am certain that the days when workers are kept out of boardrooms are numbered. It seems to me highly desirable that those employed in an industry should be encouraged to share in policy decisions and should have representation on the board, which would ensure informed and responsible participation at every level. To equate an officer, as paragraph 9 does, with an adjudged bankrupt, or a person who has been surcharged by a district auditor to an amount exceeding £500, or someone who has had a sentence of imprison-
1304
ment imposed on him for a period of not less than three months without the option of a fine, is hardly flattering.

§
I suppose that some people think that if employees were allowed to become members of boards they might have a subversive influence and it might be an indication that subversive influences could be expected somewhere. I think it is time that we grew out of this. It may be that the all-Party study mention by Mr. Graham Page in another place, as reported in the OFFICIAL REPORT for March 16 in column 1690, will cover water authorities as well as officers of local authorities. I have tabled this Amendment not in any expectation that the Government will gladly accept it, or are prepared to accept it at all, but rather to sound out the position. I should be grateful if the noble Lord when replying could give an indication whether they intend that the all-Party study should include water authorities with local authorities. I beg to move.

I need hardly say that neither the Government nor the draftsmen suppose for a moment that because a number of people are catalogued under paragraph 9 of Schedule 3 they would all be classified alike. This Amendment has an interesting effect. It would, if the Committee agreed to it —and I hope that the noble Lord will not press it and that the Committee will not agree to it—have the effect of allowing the chief executive of the water authority to be appointed as a member of it. In this case we have the interesting line-up in which the noble Lord, Lord Garnsworthy, is espousing the cause of the C.B.I. against the local authority associations and against his own Party in another place. This may be an inadvertence, but that among other things is the effect of the Amendment.

In so far as it is a probing Amendment I would respond by saying that we are all in principle wedded to the proposition that people who work in an industry should as far as possible be able to exercise their stake in it and have their representations properly weighed and so on. But the situation which we have at the moment and on which both Parties are in agreement is that the proposition which has hitherto applied—that the employees of an authority should not be eligible to stand as members of the same
1305
authority—is being applied here. The broad philosophy is that these bodies are more akin to local authorities than to ordinary commercial organisatoins. That is the reason why I shall advise the Committee that the Amendment is not acceptable. As I say, another reason why the noble Lord will not care to press it is that it would put him in direct confrontation with his own Party in another place; and I am sure that he would not like to be in that uncomfortable position.

I am quite sure that the noble Lord is enjoying himself in getting what fun he can out of the wording of my Amendment. I should have thought that I made it quite clear that I tabled it as a probing Amendment. I asked the noble Lord a specific question. I appreciate his reference to the water authorities with the local authorities, but I did not quite get from him that the all-Party study would include consideration of this. I wonder whether the noble Lord can say whether that will be so.

That was the main point of my tabling this Amendment. Since the all-Party study is to cover it, it seems to me that we are making a little progress. But I am not so much out of line with what even this Government are doing in the sphere to which the noble Lord has recently been transferred, the sphere of education; because the principals of further education establishments are being made full members of the governing boards and other members of the staff are being appointed by their colleagues as full members in a representative capacity. When the noble Lord has got used to the change of environment from the Department of the Environment to the higher realms of education I think he will appreciate that what I am aiming at here is that we shall secure in commerce and in industry what is happening in further and higher education. I am grateful to the noble Lord for what he has said. I am sure that he will appreciate that I am not aiming to be in any position with the C.B.I.; neither shall I at any time deliberately make the error of falling
1306
out of line with my Party in another place because by doing so I shall be wrong since they it seems to me are almost invariably right. I beg leave to withdrawn the Amendment.

§THE EARL OF BALFOUR moved Amendment No. 90A:
Page 49, line 26, after ("under") insert ("section 80 of the Local Government Act 1972 and").

§
The noble Earl said: This Amendment is a little technical and is really of a drafting nature. In Clause 9(1Xc) appear the words: "under Part X of the Local Government Act 1933". The whole of that Act was repealed by the Local Government Act 1972. Therefore I feel that anybody wanting to check this will be looking at a blank page; it will not be on the Statute Book. But I feel that the situation has been saved to a certain extent by the Local Government Act 1972. Section 80 of that Act, under the rubric "Disqualifications for election and holding office as a member of local authority", reads in subsection 1c:
has within five years before the day of election or since his election been surcharged by a district auditor to an amount exceeding £500 under Part X of the 1933 Act …".

§
Therefore I feel that my Amendment may assist in making sense of this small part of the Bill. I put down the Amendment to clarify the situation where references are made in legislation to Acts which have been repealed. I beg to move.

I am grateful to my noble friend Lord Balfour for his desire to help us. But while he is perfectly right that the 1933 Act has been repealed by the 1972 Act we still need to have this reference in the Bill because the disqualification relates to somebody who in the past five years has been subject to surcharge under the 1933 Act. That five-year period has still to elapse, so that although the Act has been repealed there could conceivably be people who were disqualified under it and whose disqualification needs to be referred back to that Act. That is the reason why it needs to remain as it is here in the Bill. Paragraph 9(1)(e) of Schedule 3 is complementary to paragraph 9(1)(c) and refers to Part VIII—not Section 80 of the 1972 Act—in order to cover disqualifications which may have taken place after the
1307
repeal of Part X of the 1933 Act. I think that the noble Earl and the Committee will see that we need two references, paragraph 9(1)(c) and 9(1)(e), which cover disqualifications under the 1933 Act and those which may occur under the 1972 Act. Both are covered in the Bill but I am grateful to my noble friend for moving his Amendment.

THE EARL OF BALFOUR

I am grateful to my noble friend for that explanation and I beg leave to withdraw the Amendment.

§LORD SANDFORD moved Amendment No. 91:
Page 50, line 43, leave out from ("to") to end of line 45 and insert ("119 of the 1972 Act (which contain miscellaneous provisions relating to officers and former officers").

§
The noble Lord said: This is no more than a technical Amendment. It is required to add Section 118—" Payment of salary, etc., due to mentally disordered person "—and Section 119—" Payment due to deceased officers "—of the Local Government Act 1972 to the sections of that Act already applied to staff and former staff of water authorities. These additional provisions would enable an authority to act quickly when an officer was affected by mental illness in providing any sum up to £500 for the benefit of him or his family—Section 118; or to make an early payment of a sum due on the death of an officer without requiring the production of a grant of representation to the estate of the deceased—Section 119.

§
Page 56, line 19, leave out paragraph 33 and insert—
("33.—(1) Subject to the provisions of this paragraph, a water authority and the Council shall have respectively all the powers of a
1308
principal council or a local authority for borrowing money under paragraphs 1 to 6 and 8 to 11(2) of Schedule 13 to the 1972 Act and for lending money under paragraphs 13 and 14 of that Schedule; and paragraphs 20 and 22(1) of that Schedule shall apply as respects the exercise of those powers.

§
(2) The provisions of the said Schedule 13 mentioned in subparagraph (1) above shall, for the purposes of this paragraph, have effect subject to all necessary modifications and in particular the following—

(a) any reference to a principal council or a local authority shall be construed as a reference to a water authority or to the Council;

(b) for the words from the beginning of paragraph I to the end of paragraph 1(a), there shall be substituted the following words—

§
"1. Without prejudice to paragraph 2 or, as the case may be, paragraph 22 of Schedule 3 to the Water Act 1973—

(a) a water authority or the Council may borrow money for the purpose of lending money to any other water authority or to another authority under paragraph 13 or 14 below; and",

and in paragraph 1(b) thereof the words "other than the Greater London Council" shall be omitted;

(c) for the reference in paragraph 4(1)(d) to section 228 of the 1972 Act, there shall be substituted reference to paragraphs 17(2) and 37(5) of this Schedule, as the case may be;

(d) in paragraph 5(1)(b) the words in parentheses shall be omitted and, for subparagraphs (2) and (3) of that paragraph, there shall be substituted the following subparagraphs:—

§
"(2) The aggregate of the amount outstanding on bills issued by a water authority or the Council under subparagraph (1) above shall not exceed a sum equal to one-fifth (or such other proportion as may be prescribed by an order made by the Treasury) of the estimated gross income of the water authority or the Council, as the case may be, during the current financial year, being the income derived respectively from charges payable to that authority under section 27 of the Water Act 1973, or sums payable to the Council under paragraph 32 of Schedule 3 to that Act.

§
(3) A water authority or, as the case may be, the Council shall not borrow by the issue of bills in any financial year during which their estimated gross income as so derived does not exceed £3 million or such other sum as may be prescribed by an order made by the Treasury.";
(e) for paragraph 9 there shall be substituted the following paragraph:—

§
"9.—(1) Where any money is borrowed by a water authority for a purpose consisting of or including the construction of buildings or other permanent works—
1309

(a) the water authority may, if they think fit, postpone the repayment (by sinking fund or otherwise) of the principal sum borrowed until the end of the preliminary period;

(b) whether repayment is so postponed or not, the purposes for which the water authority are authorised to borrow money under this Schedule shall include the borrowing of money to pay interest on the principal sum borrowed during the preliminary period.

§
In this paragraph "the preliminary period" means the period beginning with the date of the borrowing first mentioned in this paragraph and ending with whichever of the following dates first occurs, that is to say—

(i) the date of the fifth anniversary of the date of that borrowing, and

(ii) the date on which the buildings or works in question are first brought into use."

(f) in paragraph 10(1)(a) the words in parenthesis and, in paragraph 10(2), the words from "above" to "and" shall be omitted;

(g) in paragraph 12, for the words from the beginning to "may" where it first occurs, there shall be substituted the words "Two or more water authorities, or a water authority and the Council";

(h) in paragraph 13(1) the words "or the Common Council" shall be omitted and for paragraph 13(2) there shall be substituted—

§
"(2) The authorities to whom sums may be lent under sub-paragraph (1) above are water authorities, internal drainage boards, or joint water boards or joint water committees"; and

(i) in paragraph 22(1) for the definition of "revenue fund" there shall be substituted the words "and expressions to which meanings are assigned by the Water Act 1972 shall have the same respective meanings".").

§
The noble Lord said: I apologise to the Committee for the fact that I shall have to explain this Amendment at some length. It deals with the borrowing powers of the National Water Council and the regional water authorities. The borrowing powers of the existing river authorities are governed by the Water Resources Act 1963, and broadly speaking they follow the old local authority model, with provision for borrowing on the market on the strength of mortgages secured on their revenue—subject, of course, to Ministerial sanction. The constitution of the river authorities is closely related to local government, and their revenues, other than water extraction charges and, for example, fishing licence fees, are derived from precepts on county and county borough councils. Under
1310
this Bill the water authorities will have close links with the local authorities in many respects, but apart from land drainage their revenues will no longer have a local taxation base. In this respect they may be said closely to resemble the nationalised industries.
In Circular 92/72 the D.O.E. said that water authorities would not be subject to loan sanction procedure but would be enabled to raise money from Government sources to meet their future requirements for outside capital. The 1972 Consultation Paper on Finance said that the Government approval of 7-year rolling programmes would be required and:
The National Water Council and the regional water authorities will be given power to borrow temporarily within the terms of a general authority given by the Secretary of State for the purpose of meeting their obligations or discharging their functions. Regional water authorities and the National Water Council will have powers to borrow from the National Loans Fund within the amounts of total indebtedness approved by the Secretary of State.
Although it was expected that something much closer to the nationalised industries might emerge, the Association of River Authorities commented:
Regional water authorities should have the freedom of wide access to the capital market, and should not be tied to the National Loans Fund nor to financing all their loan requirements by loans of long terms at fixed rates of interest. Their powers should include the issue of Revenue Bills.

§
Those comments of the Association of River Authorities were supported by the A.M.C., the R.D.C.A., and the U.D.C.A., and also I understand those views were pressed by many individual authorities. In the event, the Bill requires water authorities to submit programmes for Ministerial approval, providing overall financial control by Clause 25(5), and there is a general power of direction vested in the Secretary of State by Clause 5(2). Borrowing must be either in sterling from the Secretary of State or in other currencies subject to control by the Secretary of State and the Treasury, with a special provision from the Commission of the European Communities and the European Investment Bank.

§
The provisions are broadly in line with those governing the nationalised industries but they are even more restricted, for the nationalised industries may at least borrow on the sterling market. In
1311
a Standing Committee in another place the Government sought to justify this arrangement on the grounds that water authorities with their revenues based on charges would not be first-class borrowers without a Treasury guarantee. With a Treasury guarantee they must bear with the Treasury control approved by the Radcliffe Committee and the Select Committee on Nationalised Industries. On the face of it those arguments have respectability, but there are two factors which persuade us that the water authorities would be better off with access to the market, even without a Treasury guarantee. The first argument is that informal inquiries in the City suggest that the Government's fears about the standing of water authorities are exaggerated, and experience in the nationalised industries indicates that the premium would not be more than ⅛ per cent. to ¼ per cent. in the case of a substantial public body drawing its revenues from charges and not from taxes. I am bound to add that the suggestion that the regional water authorities would not be first-class borrowers without a Treasury guarantee seems to me so much nonsense. I cannot imagine that there will be any risk involved in lending money to a monopoly selling such an essential commodity as water.

§
The second and more weighty objection to the proposals in the Bill stems from the practice adopted by the Treasury in regulating borrowing by the nationalised industries, which has caused their financial advisers considerable concern and frustration in recent years, notwithstanding some concessions by the Treasury. The main complaint is that the Treasury, having fixed the period for which money may be borrowed for a given purpose varying with the nature of the asset to be provided but by no means corresponding with its likely life, insists that actual loans in sterling shall be taken up for the whole of that period. It is asserted with some force that this practice was formulated in an area of stable interest rates, and its indiscriminate application in modern conditions means that the borrowing corporation is tied quite unnecessarily to high interest rates for lengthy periods. I must stress the fact that by prudent management of their borrowing, many local authorities and river authorities have managed to keep
1312
the average rate of interest on their consolidated loans fund at less than 6 per cent. Figures for the nationalised industries are not available, but it is thought that if similar freedom had been extended to them millions of pounds could have been saved in interest. If local authorities and river authorities can so manage their finance, there is every hope that water authorities can do the same and they should be given the same freedom. The least that the Government should do if Treasury controls are imposed is to give the authorities an assurance that they will be exercised so as to permit prudent financial management and avoid unnecessary interest charges. The consumer should not be expected to bear them in addition to the threatened loss of rate support grant on the sewerage and sewage disposal services.

§
Insistence by the Treasury for such loans to be upon equated borrowing periods similar to those for the nationalised industries at an agreed rate of interest will not allow the flexibility that at present exists within the water industry, nor does it take account of the problems of replacing existing borrowing which varies, as it does with all local government services, from temporary money at two days' notice up to maturing longer term loans. The future capital expenditure of all the regional water authorities will probably rise at today's prices from £250 million per annum to about £350 million per annum in the late 1970s. After the deduction of that proportion which is to be self financed, the balance will be unlikely to have much effect on the well established local authority money market. The withdrawal of these facilities for the water industry will not give any material advantage to local government nor, we suggest, would it affect in any way Treasury and Bank of England currency management.

§
Just about all this Amendment does is to give the National Water Council and the regional water authorities the same borrowing powers as the local authorities have under the 1972 Act, which in themselves, I would suggest, are prudent and careful enough. In the case of the local authorities, the guarantee of financial security is the rate raising power; in the case of the regional water authorities the monopoly sale of something absolutely essential to life itself is
1313
surely more than security enough. I beg to move.

This is a subject in which no possible previous reincarnation of mine can help me at all, and therefore the noble Lord need fear nothing from what I have said or what I may say. He is, of course, quite right that in this Amendment and, I think, in Amendment No. 94A which goes with it—it is the other half of it—he is trying to adapt the Local Government Act powers and apply them to these two bodies, the National Water Council and the ten regional organisations, and the judgment must I think depend on about two or three sentences in the noble Lord's speech. He has said that the borrowing powers of the existing river authorities depend on the ordinary mortgage on their revenue which all local authorities use in order to raise money on any market. That at least I have seen, because I have looked at borrowings from Germany by a local authority and I have seen the way in which this legal document is made out, and it is in fact a mortgage on the revenue, and the revenue in the case of the local authority comes straight from their rates. The noble Lord said that in the case of existing river authorities the revenue comes from their precepts on the rates, so that it is second-hand but the same thing. The real test is whether or not the noble Lord and those who have advised him on this matter are right that the sale of a monopoly object like water without any precepting powers does, in terms of financial management and going to the City and going to the market, come to the same thing as having a mortgageable commodity like the income from rates or a power to precept.

I think this is where we shall differ. I am not going through the whole argument again. As the noble Lord rightly said, this took a little explanation; he has been through the arguments put forward in another place; he has been through the parallel to the nationalised industries; he has been through the Commission under the chairmanship of the noble and learned Viscount, Lord Radcliffe; he has been through the Select Committee in another place and we really have this choice to make. The advisers from the Treasury, who have attempted
1314
to tell me about this, say that we have a better parallel here in the nationalised industries than we have in the local government world as laid down in the Local Government Act of last year. I am told—and I am bound to say that I have no possible personal experience with which to dissent from this—that if either the Council or a regional water authority tried to go to the market on the basis of the security they would have, the chances are that they would have to pay greater interest rates than would otherwise be the case. Now this cannot do anybody any good and it depends upon the judgment about the security that the noble Lord has spoken about.

There are precedents for this; or rather there are analogies. There have been public undertakings like certain port authorities which have had trouble and have had to raise money at a substantially higher rate of interest than would otherwise be the case because they have not got the security upon which to draw. I am therefore advised that the alternative is exactly what the noble Lord said—either to go to the market and take the risk of having to pay a higher rate of interest, or to submit to the guarantee of the Treasury—or rather to bask to some extent in the guarantee of the Treasury. If you are going to do the latter, then you have to stick to the rules; and the rules are, apart from the temporary borrowings with the sanction of my right honourable friend, that you borrow according to the ordinary arrangement of borrowings from the National Loans Fund, and the noble Lord has explained this. I have to leave this to the judgment of those who are experienced in the world of public finance, but we say that if they depended upon the sort of local government code the interest rates would be higher than otherwise. This is not what the noble Lord said, because since the debates in another place those who have been advising him have been to the City and this was reflected in his speech. He was told that the rates would not be acceptably higher.

This is not the same information as we have, and, on this, the issue has to be judged between us; but this is not the advice I have been given. If that is so, it depends upon the lack of the guarantee based upon the mortgageable security of the precept or the rate itself, and therefore, in order to get a borrowing power at
1315
all, there must be the Treasury guarantee, and with the Treasury guarantee go the rest of the consequences of being allowed access to the gilt-edged market and the control the Treasury exercises over that. I am told, and I am advised, that it is the latter course that is the right one in these circumstances, and that is the way the Bill has been drawn.

It may be a matter of judgment, because of course these organisations do not exist; but there is substantial experience, I think, in the Treasury of setting up new organisations of this sort, and I simply have to tell the Committee that, in the circumstances that the noble Lord has very fully described and which I have attempted to elaborate a little, we think it is right that there should be the Treasury guarantee to take the place of what we think is a somewhat doubtful basis for borrowing on their own account and, if so, then we must have the scheme for Treasury control under the National Loans Fund in the Bill. I cannot take the matter further than that. The noble Lord's information and advice is not the same as mine, but mine is based upon what I believe to be the current situation, and I must leave it to the Committee to decide between us. It is not a matter upon which I would want to disagree with the noble Lord from the point of view of the protection of the consumer in trying to keep interest rates down. This must be in the interests of us all; but the way we think we should do it best is the way in the Bill, with this guarantee from the Treasury. I hope the noble Lord will at any rate consider what I have had to say, and it may be that he will not want to press this to a Division tonight.

I wonder whether the noble Viscount could answer one point I made, or one request I made to him, when I said that the least the Government should do if Treasury controls are imposed is to give an assurance that they will be exercised so as to permit prudent financial management and avoid unnecessary interest charges. Could the noble Viscount give me any sort of guarantee that this will be
considered by the Treasury in relation to all these borrowing powers? My own local government experience—and I have a little experience of financial matters in this connection—is that we found occasionally that by
1316
borrowing short-term we could get some advantage over borrowing long-term and being tied to a long-term loan for a very great number of years. This is common experience, I think, of all local authorities. What I should like to secure from the noble Viscount before I withdraw the Amendment, which I propose to do, is some answer to the point that I make: that the Treasury will at least try to ensure that the water users are not mulcted in unnecessary interest charges, because that is what it comes to. Could the noble Viscount say anything on that point?

VISCOUNT COLVILLE OF CULROSS

The short-term loan is a different matter, because that is covered in this Schedule.

I appreciate it is a different thing, but it is very important, as the noble Lord has said; therefore, it is dealt with separately in the Schedule, and the short-term loan is subject to being dealt with by the consent of my right honourable friend. I think, therefore, there is nothing between us on that. The two points that the noble Lord made about the long-term loans seem to me to make sense from every point of view. They must be the kind of objectives the Treasury would wish to pursue, and although I have not got written down on any piece of paper a direct answer to the noble Lord which will say "Yes" and "Yes" to those two particular items that he has raised, I will certainly go away, if I may, and ask if those are acceptable criteria. I would expect that they are. I would expect that they are the normal way in which the Treasury would try to run its functions on the National Loan Fund, and in regard to those who are guaranteed by it. Certainly, if there is any contrary indication I will tell the noble Lord, but I cannot see how these two points which the noble Lord has made could possibly be contrary to anybody's good financial policy.

I am grateful for that. I must say that, despite the fact that my information came from reliable sources, I think the Treasury is perhaps better informed on the City possibilities of interest rates. Having regard to that probability, plus what the noble Viscount
1317
has now said, I beg leave to withdraw this Amendment.

§LORD CHAMPION had given Notice of his intention to move Amendment No. 93:

§
Page 57, line 16, at end insert—
("Not being less than would be payable by way of grant if the water authority were a local authority and its expenditure reckonable for the purposes of such grant.)

§
The noble Lord said: This Amendment is closely tied up with one that we discussed on Clause 27, and perhaps I may reserve my position on it until after I have read what the noble Lord said in reply to me on the Amendment to Clause 27, and, if necessary, return to it on Report. In the meantime, I do not propose to move the Amendment.

§LORD CHAMPION moved Amendment No. 94:
Page 57, line 16, at end insert ("and after consultation with the Water Space Amenity Commission, make to a water authority out of the money provided by Parliament grants of such amounts as the Secretary of State thinks fit for the purpose of enabling the authority to make only such charges as are reasonable for the authority's recreational facilities").

§
The noble Lord said: This is a simple and rather modest Amendment which seeks to strengthen the Bill in relation to grants for recreation. Some of the friends of recreation, who, on the whole, welcome Clause 20 of this Bill, think that this Amendment is much too modest, but it has been designed in such a way that we can put it forward with the confident expectation that the Government will be prepared to accept it. The present position is that neither river authorities nor water undertakings arc eligible for grants tinder the Countryside Act even when carrying out exactly the work to provide recreational facilities which would be substantially grant-aided if carried out by the local authorities.

§
The position needs altering if the water authorities are to make a success of the task imposed upon them by this Bill. Just how great is the need for Government intervention in relation to pleasurable enjoyment in leisure hours seems to me to be the theme running through the excellent Report on the Select Committee on Sport and Leisure—a Report which
1318
I would say does credit to your Lordships' House and to those who made up the Committee. In support of the Amendment that I am now moving the whole of that Report would bear quotation, but time will not permit, so I must content myself with a few relevant quotations from the section headed "Water recreation", and from the conclusions. In paragraph 25 we find these words:
Some forms of water recreation cannot be charged for, and few can hope to pay their way with realistic charges.
I would especially stress that sentence:
Some forms of water recreation cannot be charged for, and few can hope to pay their way with realistic charges.

§
In paragraph 28 the Report says:
As there is a need for central grant-aid in the field of water recreation, the Government should consider whether the Water Space Amenity Commission would be a suitable agent for distributing this aid and whether it should be given grant-aiding powers similar to those of the Sports Council. With this financial strength the Commission would be better able to exhort owners of water nationally to open this precious facility to public use. No change in financial provision, however, should be considered which would affect adversely the level of grant available to the British Waterways Board".
Although my Amendment does not cover that specific point, the consultation mentioned in the Amendment would open the door to a consultation on the matter of the appropriate body to act as the agent for distributing the aid. The Committee considered this whole matter on Thursday last on an Amendment moved by the noble Lord, Lord Byers, and although I was not wholly in agreement with the purpose of the noble Lord's Amendment it seemed to me to be designed to ensure what we think should be the purpose of a recreation grant to the water authorities, and that is, to meet the point made so well in the Select Committee's Report. I have mentioned what the Committee said.

§
Replying to the debate on the Amendment to Clause 20, and seeking to deal with our Amendment No. 94 at the same time, the noble Lord, Lord Sandford, said:
These are indeed admirable Amendments, and I should be happy to accept them if I did not feel that what they are seeking to do is already fully and adequately provided for in the Bill in Schedule 3, paragraph 34, where there is this permissive power which the noble Lord, Lord Byers, so rightly mentioned should be somewhere for the Secretary
1319
of State to make grants to water authorities. In sub-paragraph (1)(b) of paragraph 34 your Lordships will see that there is additional provision for a direction to be given, if necessary, indicating the stated purpose"—
it is difficult to read what the Printed Paper Office have provided for us and I shall have to leave out a little bit, because, frankly, I cannot read it—
Furthermore, there is also a power to lend sums of money. So I can assure all three noble Lords that what they are seeking to do, which is something that ought to be in the Bill, is already in the Bill, so their points can be said to be fully met.
I am moving this Amendment because I am not wholly satisfied with Lord Sandford's statement. Nowhere in paragraph 34 of this Schedule is there any specific reference to recreation. The paragraph gives to the Secretary of State a wide power to make grants, and the demands on him will be many indeed. I foreshadowed such a request for a grant for another purpose on an Amendment that I moved earlier this evening. The noble Lord, Lord Sandford, had kind words to say about the possibility of grants for recreation. But kind words do not go into Bills, and really they bind no Minister except perhaps the one who makes them: they certainly do not bind a successor. Our Amendment, which I should certainly like to see as part of the Bill, would bind the Secretary of State to consult the Water Space Amenity Commission and, after consultation with the water authorities, make grants to them of such amounts as would enable them to meet the plea of the Report of the Select Committee for additional sources of finance to enable them to make realistic charges; and realistic charges we are defining as "reasonable".

§
Recreation deserves a specific reference in the Bill in relation to grants, and perhaps particularly having regard to the fact that elsewhere in the Bill water authorities are enjoined to so
discharge their functions as to secure that, taking one year with another, their revenue is not less than sufficient to meet their total outgoings properly chargeable to revenue account,
and in the charges clause, Clause 27, they are told,
In fixing charges for services, facilities or rights a water authority shall have regard to the cost of performing those services, providing those facilities or making available these rights.1320
The final quote I would make from the Report of the Select Committee on Sport and Leisure is from the Conclusion No. 7, which says:
The Water Bill should be amended to alter the financial requirements placed upon regional water authorities so that the authorities are not prevented from carrying out their recreational duty.
Speaking with some little local government service, I would strongly urge that point on the Government, for it is inevitable that water authorities will look askance at spending freely on recreational facilities if the cost is to be borne by a charge on water consumers and sewage disposal services. I believe that the case for this Amendment is made out, and I very much hope that the Government will accept it. I beg to move.

I should like from the Government Back Benches to give support to what the noble Lord, Lord Champion, has said. He has made out a strong case for thorough consideration of these points. I do not want to repeat the points or to go into any detail at this late hour, but I agree with the noble Lord that Lord Sandford's reply was not really satisfactory. The case to which we have just listened with great interest is a strong one. Over the weekend I had the opportunity to talk with the chairman of the Water Users' Committee and others in connection with the discussions now going on, and I can assure the Government that there is an increasing desire and need for water space for recreational purposes. As the noble Lord, Lord Champion, has just said, it is not always possible to make ends meet, but the difference is really very little when you take into account the tremendous advantages of being able to get, by just a little grant in aid, water recreation in all its forms quite close to great areas of population. Here is a case which has been well made out and which I very much hope the Government will look at very carefully indeed.

I am sorry that my noble friend Lord Sandford did not convince the Committee about this matter when we discussed a cognate subject on an earlier clause in the Bill. If one looks at paragraph 34(1) on Schedule 3, there is a
1321
power. Earlier this afternoon I was being asked questions about the word "may" when it related to "the Secretary of State may make regulations", and those who spoke on that Amendment were saying that they thought that the Secretary of State "must make regulations". That was the context of that particular Amendment. Here I do not think anybody would suggest—and certainly the noble Lord's Amendment does not suggest it—compulsory grants for this particular purpose. Therefore, as I read the Amendment and as I listened to the noble Lord's speech, he is not saying that my right honourable friend must make grants or loans for this particular purpose, but that these are specific purposes which ought to be marked out in the Bill for special mention because of their inherent worth; and I think that is what my noble friend Lord Wakefield of Kendal was saying as well.

If one analyses this question, one finds that there are powers (and this is what my noble friend Lord Sandford said last week) under paragraph 34(1) whereby my right honourable friend may make to the water authority grants such as he thinks fit. Therefore all that this Amendment adds is a requirement for consultation beforehand. I should have thought it inconceivable that my right honourable friend would make grants to any water authority for these particular recreational purposes without beforehand taking the opportunity to consult the Water Space Amenity Commission, and probably a lot of other people as well, because there are many interests concerned in this particular matter.

May I take a narrower point on this matter—it refers to the wording of the Amendment but is quite important. If in the Schedule to this Bill you pick out one special class of recipients for a grant and say that you are enabling my right honourable friend to make grants so that the authority have to produce reasonable charges, the implication in law is that they may charge unreasonably for everything else. I know the noble Lord does not want that: there is no possible implication in what he said that that is so. But this is the difficulty about using a very fair form of phraseology in the Amendment by which, in specifying one particular form of opera-
1322
tion or activity which shall be grant-aided and expressing it in these terms you cast doubt on the rest of the activities which the water authority may have to support or deal with, and you suggest that they are thereby empowered to make unreasonable charges for other things. Of course nobody wants that; and that is one of the difficulties of picking out a particular function and trying to deal with it in this way.

The noble Lord, Lord Henley, will be moving an Amendment in a moment or two which deals with other sources of grant, and there are indeed powers to give grants for recreational facilities on water from local authorities and from sports councils—and we shall discuss this issue in terms of the voluntary bodies in a moment. The fact remains that there is already in the Bill the powers that my noble friend Lord Sandford mentioned before. If I look back over the number of enabling provisions that I have heard discussed during Committee proceedings over what is now becoming quite a long period of time, I remember hearing it said time and time again that one ought to be more specific and to pin things down; but the fact remains that there is the power in this Bill already.

What we are really saying is that the water authority should be given flexible powers to charge, and to charge reasonably (which they already have), and that we ought not to single out one particular function, such as recreation, for special mention. It may very well be that with recreation—and navigation is even more important—it is often difficult to identify the precise costs attributable to the activities provided. There may be shared costs. As an example of this, I remember my own activities with the Great Yarmouth Port and Haven Commissioners, where banks on the Broads have to be strengthened. This is needed, first, for land drainage purposes, so that the combined action of the coypu and the passing river craft's bow wave does not undermine the banks and cause massive floods everywhere; and, secondly, to provide a reasonable hard-standing against which boats may moor. In this way there is a complete mix-up of functions. I give that as an example, from personal experience, where the precise costs are difficult to allocate. For instance, if one did not pile large areas of banks on particular rivers
1323
they might become impossible of navigation; yet is it in fact a recreational function, a land drainage function, or what is it? It is difficult to identify the recreational aspects of these matters.

So what we are saying is that we have the powers in the Bill. The Bill is flexible and there is a possibility not only of grants from the other sources I mentioned but also from the Secretary of State for this particular purpose. If grants were to be given to a particular regional water authority, we do not think that could be done without consultation with the kind of body mentioned in the Amendment. Therefore, although I agree that this power is not specific—and that is something which has been criticised many times in your Lordships' House—I hope that the noble Lord, with his long experience in Parliament, will realise that this is a fairly ordinary way of drafting and it is not one in which one has to make a specific mention—quite apart from that tiresome but rather important point that I mentioned in the middle of my speech. I therefore hope that, as it were, on a second time round he will realise that we have these powers in the Bill and that he does not need this Amendment after all.

I recognise that there are the necessary powers in the Bill, but I am anxious to ensure that they are used, and used for recreational purposes. I am grateful for the powerful support given to the Amendment by the noble Lord, Lord Wakefield of Kendal. His knowledge in the recreational field is unrivalled. I may say that I remember him so well on the rugby field in the old days—though as a supporter of Wales I disliked what he did to us. Nevertheless, his knowledge in this
general field of recreation is, I think, surpassed by none. I must admit that when I put down this Amendment I was in the little difficulty that the noble Viscount has pointed out: namely, that if you pick out one specific purpose then by implication you cast doubts on other activities which ought perhaps to be grant-aided. From that same Box I made the same point a few times myself when I was a Minister, so I rather feared that the noble Viscount would come on to that one. But he has expressed the general sympathy of the Government—as indeed did the noble Lord, Lord Sandford, on a previous
1324
Amendment—to the purpose behind this Amendment. Having regard to the difficulties which have been pointed out to us by the noble Viscount, I beg leave to withdraw the Amendment.

§
Page 60, line 6, at end insert—
(". Without prejudice to the generality of paragraphs 2 and 22 of this Schedule, the Council and any water authority may assist (whether by the making of grants or loans, or in other ways) voluntary bodies whose purposes include the protection or enhancement of recreation or amenity related to water, or Vie promotion of education and public interest in the use or management of water and rivers.")

§
The noble Lord said: As the noble Viscount, Lord Colville, says, my Amendment has certain aspects which are very similar to those which the noble Lord, Lord Champion, was trying to get the Government to agree to by means of his Amendment, but my Amendment would manage to do it without specific recipients being mentioned. It may well be that the noble Viscount will tell me also that the powers to do what I want already exist in the Bill; and if that is so and I can get proper assurances, I may well be satisfied.

§
My Amendment goes rather wider than that of the noble Lord, Lord Champion, and indeed would embrace what he wishes to do. It would add a new clause enabling the National Water Council and any regional water authority to make grants or loans to those voluntary bodies who are specially involved in the protection or enhancement not only of recreation but also of amenity, and indeed the promotion of education and the public interest as well. This, I think, is a useful new power. Ministers make a good deal of play on the environmental and recreational use of water space, and here voluntary bodies have a vital role. They may be the medium through which these activities can be encouraged. What I have in mind are things like nature trails and nature reserves which could he arranged by county naturalist trusts, either as part of a reservoir or on adjacent land belonging to regional water authorities, or the establishment of field study centres for use by schools, assistance for new youth hostels and aid to
1325
voluntary bodies in improving the amenities for the public—for example, shared public paths on land belonging to R.W.A.s. My Amendment says:
Without prejudice to the generality of paragraphs 2 and 22 of this Schedule …
What those two paragraphs say is that a water authority shall have power to do anything—and "anything" includes expenditure and lending money—calculated to facilitate any of their functions. What worries me about this being used as one of the powers suggested by the noble Lord is that I am not happy as to what "functions" really means. Do they or do they not include amenity? The same applies to paragraph 34(1). It also uses the word "functions". I do not know how far amenity would be embraced by this. Nevertheless, I am trying to bring the voluntary bodies into this to enable them to get assistance by way of grant or loan to do all those multitude of things connected with water, reservoirs and water space with the land belonging to the regional water authority with which they commonly occupy themselves. This would do everything—and perhaps more—that the noble Lord, Lord Champion, wants. I beg to move.

VISCOUNT COLVILLE OF CULROSS

I am almost beginning to feel at home when mention is made of voluntary bodies, something for which I have some Ministerial responsibility, but I doubt whether they are the ones which would benefit from this Amendment. The noble Lord is quite right to ask us about this, and to ask for a definition of the functions referred to in paragraphs 2 and 22. As I indicated a moment ago, voluntary bodies are already eligible for grants in relation to water recreations from local authorities, from the Sports Council and, in the case of voluntary bodies, under the Countryside Acts.

It is the intention of the Government that where it is thought appropriate the regional water authorities should work closely with the voluntary bodies in the development of facilities for water recreation. I do not at the moment know any reason why that should not also apply to immediately adjacent land areas, which sometimes include things like nature trials. In those circumstances, it may be that it is more appropriate for the regional water authorities to assist a voluntary body than to provide the facilities
1326
itself. Those are among the functions that a regional water authority will have power to deal with under paragraph 2 of the Schedule. Those functions are functions covered by paragraph 2. The noble Lord, Lord Henley, specifically wanted an assurance on that point.

When it comes to the National Water Council, we look at paragraph 22.

LORD HENLEY

Would the noble Viscount repeat that? I cannot find that reference.

VISCOUNT COLVILLE OF CULROSS

Paragraph 22 reads:
The Council shall have power to do anything (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights)"—
That is the expenditure that the noble Lord is particularly interested in—
which in the opinion of the Council is calculated to facilitate or is conducive or incidental to, the discharge of any of their functions.
The noble Lord wanted to know whether this area of assisting voluntary bodies on the recreational side was part of their function. I am simply telling him that it is. They are empowered to spend money under that paragraph. The same applies to the National Water Council under paragraph 22, which is the other point the noble Lord mentioned. Again, that is one of their functions. If the Council thinks that assisting outside bodies is in the best interests of the water services, it is within their function. Again, the answer is "Yes, it is"; it is already covered in the drafting of the Bill.

Within the terms of reference of the bodies that we are setting up under this Bill the Amendment is unnecessary, and within the Bill one would not want to go beyond this. I have mentioned the other sources of grant and assistance, and I do not think that the authorities or the council under the Bill would be the appropriate bodies to distribute grants which went beyond the functions here because we have the related powers that I have mentioned at the beginning of this short speech. Where you have recreation and amenity it may be achieved through the existing grant machinery; and where there is a specific function relating to the water side the powers are already in the Bill. Although yet
1327
again I would advise the Committee not to try and spell this out as an individual item on the same reasoning that I mentioned to the noble Lord, Lord Champion, just now, we have in fact the breadth of power necessary to cover the point raised by the noble Lord, and I hope he will be satisfied with the explanation that I have given.

LORD HENLEY

I thank the noble Lord for that assurance. It covers what I have in mind—or at any rate, I hope it does. It covers what the noble Lord, Lord Champion, has in mind, and I beg leave to withdraw my Amendment.

With your Lordships' permission, I should like to use the motion before us to probe on paragraphs 11, 12 and 13 of Schedule 3 which deal with remuneration and allowances, officers and pensions. Those dedicated members of our society who read our Hansard, or listen to our debates, may think from the way that we have been discussing the affairs of the regional water authorities that we are talking about very small organisations indeed—that we are talking about the activities of those surrounding a parish pump. What is happening is that 1,400 organisations—many of them important—are being concentrated into ten major authorities, many of whom—in fact, I would have said "all of whom"—are larger and more significant than the various local authorities which they encompass. They are dealing with the whole of the infrastructure of those areas for which they are responsible for the provision of water: the supply of water to housing and industry and the removal of the effluents of housing and industry, and their return to the great watercourses of their areas in a condition that does not damage the environment. They are doing work of great importance and I would suggest they are organisations as large as most industrial organisations in this country.

All Government explanatory papers that have been published have stressed the importance of maintaining momentum in this period of change from the
1328
1,400 organisations that exist to-day to the 10 which are coming into existence on April 1, 1974. It is quite clear that the coming and going, the reshuffling and reorganisation, that must take place during this period from (shall we say?) August to April is going to be of major importance. Yet I believe—and I am issuing a warning to the Government—that we may be about to run into very great difficulties indeed. The staff for these great organisations is to be supplied by the Water Services Staff Commission, which I think we set up in Schedule 5 to the Bill. I suppose the Government are applying whitewash. The Staff Commission in fact already exists in an advisory capacity, and to-night we shall legitimise its existence. But it has of course at this moment no power.

A consultative paper has been circulated by the Department of the Environment and the Welsh Office which lays down that the first appointments which should be made are those of the chief executive officer and the financial officer, and that paper envisaged that the Department of the Environment should advertise the chief executive officer post in time for the setting up of the regional water authorities. But as things now are this will not happen. The Staff Commission indicate that they will not advertise the chief executive officer posts before the salaries have been fixed, and of course the salaries have not been fixed. There may be good reasons for this. We now have a Pay Board. We are now in Phase 2 of the Government's control of incomes, and are approaching Phase 3, and it is natural for the Government to relate what we are trying to do in this Bill with what they are trying to do in other areas in controlling wage inflation. But we must not let administrative tidiness get in the way of making the appointments soon which will be required to get these great new organisations into being and functioning.

May I also say at this point that we must be careful not to start cheeseparing. I understand that indications are that the salaries for chief executive officers will be higher (and this is understandable because of the size of the job) than those agreed earlier this year for the chief executive officers of metropolitan county councils in the new local government reorganisation. These particular salaries range up to £13,245 a year. This may
1329
seem to many people a lot of money. Yet the chief executive officers of these ten water authorities are believed to be worth more than that figure. Many people will say that this is an absurdly high salary; but speaking from inside industry I can think of people in executive appointments who are receiving money of this kind who are not going to carry anything like the burden of the chief executive officers of the water authorities. So when the Staff Commission get in touch with the Pay Board I hope that they will not be too modest. We are creating ten major new industries in this country that will affect the environment in which millions of people will live within the various areas of their administration.

The warning I am issuing to the Government is that they must do something to prevent the momentum, which they themselves see as necessary, from falling away. We suddenly create these major new industries, which in fact speak from the voice of every tap and every effluent outflow in the country, and must ensure that they do not get into a tangle at the beginning. They have to be able to start functioning very soon indeed—for at least the two major officers, the chief executive officer and the financial officer must get on to the job, I should say, by about October 1. There is nothing in existence at this moment to make that possible. I should like to utter this warning: if we are talking about the level of salaries I think it is a good thing that local government experience should not be repeated. In local government the chief officer posts have been advertised without stating salaries while discussions drag on between the two sides of the Joint Council on proposals which are not allowed to be made public. The major problem is said to be that the percentage of the chief executive officers' salaries
which is used to measure the chief officer grades is too low as compared with those at present operating in local authorities. At present it is something like 86 per cent. against 95 per cent. in some cases. In fact the Government are trying to get these organisations "on the cheap", and in these hard days that just will not happen.

So what I am saying is that in order to make a success of this great project the Government must soon make up their minds what they are going to pay the
1330
chief executive officer, which will of course determine the whole salary scale of the water boards. They must decide what they are going to pay the financial officer, and they must give the staff commission the powers to get busy—and since we are starting from scratch I do not think we should pay too much attention to what the Pay Board is saying. What we want is job evaluation: job evaluation in comparison with industry. Having done that, that is the starting rate for the job and unless the Government make up their minds quickly on this subject the whole of the recruiting performance of the chief executive officer will be hamstrung and we shall create organisations which are either insufficiently manned or manned by second-rate individuals. In these new organisations we require people of the highest calibre and also people of experience. Obviously, there are bright young men who will get more money through promotion, but I am certain that at this stage we should be prepared to pay for experience. For this reason I issue a warning tonight, and use this stage of the Bill to raise it, that the Government should (a) realise the seriousness of the situation, and (b) not be cheeseparing in the top salaries which they are prepared to pay, because these will determine everything else in the whole organisation.

I think we should be grateful to the noble Lord, Lord Winterbottom, for raising this important matter of staff. So far as I am aware, this is the first time in the Committee proceedings on this Bill that the matter has been raised. I take the two general points which the noble Lord has made: first, that it is necessary to keep up the momentum and to find people of the right calibre to staff the regional water authorities. Secondly, I am alive to the general unsettling of the staff in the whole process of reorganisation. I have been well aware of it in local government and I can well appreciate that it is going on in the water undertakings at present.

I should like to begin by assuring the Committee that this is not a matter that we have not considered at all. My information is that the Water Services Staff Advisory Committee held its first meeting in February and has in fact had a series of meetings with representatives of the different staff associations to discuss the various points. Under Schedule 5 we
1331
make arrangements to set up a staff commission which will be on the same lines as the staff commission which is operating in the local government service. On this matter, staff representatives were of course consulted, not only about the setting up of the commission but about its size and its terms of reference.

The noble Lord, Lord Winterbottom, went on to raise the very important matter of the appointments of chief executive officers. Again, my understanding is that the staff committee will be issuing advertisements for the chief executives and some other senior posts. It is the view of my right honourable friend the Secretary of State that these advertisements should come out as soon as is possible, possibly before Royal Assent but obviously subject to the passing of the Bill itself by Parliament, because the Government believe it is essential that the regional water authorities should be in a position, as soon as they are formally set up, to appoint their chief executive in order that he may be in charge from the start of the whole operation of transferring all these responsibilities from the water services to the regional water authorities.

The noble Lord, Lord Winterbottom, raised a number of points about salaries, which I have noted, and particularly the point about the relationship between the salary of a chief executive and that of a clerk to a metropolitan county. That point will be noted, I have no doubt, by my right honourable friend the Secretary of State who is considering what the appropriate salary levels should be. That may well be a point to be inserted in the advertisement, or at least to be indicated shortly afterwards. But of course it is matter which has to be considered within the whole of the counter-inflation legislation phase 2, and there are other complicating factors. We shall take note of the other important points that he raised. We on this side recognise how important it is to get the right calibre of person in these exceedingly important jobs. I am very glad of the opportunity to pay my tribute at this stage to the work of those who have carried on in the past and over this very difficult transitional period. I hope that we shall be able to reach the right conclusion on both the appointments and salaries in future.

§EARL FERRERS moved Amendment No. 98A:
Page 61, line 10, leave out ("sub-paragraphs (8) and (9) below") and insert ("the following provisions of this paragraph").

§
The noble Earl said: Perhaps we may consider with Amendment No. 98A Amendments Nos. 98B, 98C and 99A. These are drafting Amendments to clarify the intention behind subparagraphs (7) to (9) of paragraph 1 of Schedule 4. It was intended that these sub-paragraphs should enable the total membership of the regional land drainage committee to be varied at any time after they had been set up. These subparagraphs did not make that clear and this set of Amendments places that matter beyond doubt. I beg to move.

§
Amendment moved—
Page 61, line 16, leave out from beginning to ("(shall") in line 24 and insert—(9) A water authority shall submit any determination under sub-paragraph (7) above to the Minister.(10) Any determination that a regional land drainage committee should consist of more than seventeen members shall be provisional, and shall only take effect if the Minister makes an order under sub-paragraph (11) below.(11) If a water authority submit a provisional determination to the Minister, he may by order—

(a) confirm it; or

(b) substitute for the number of members determined by the water authority some other number not less than seventeen.

1333(12) When the number of members of a regional land drainage committee has been fixed under this paragraph (whether on the first or any subsequent determination), the Minister shall by order specify, subject to paragraphs 3 and 14 below, the number of members to be appointed to the committee by or on behalf of constituent councils.(13) An order under sub-paragraph (12) above".—(Earl Ferrers.)

Amendment No. 105 and Amendment No. 111 fulfil an undertaking which was given at the Report stage in another place. They require a regional land drainage committee to consult the local authority, agricultural and land drainage interests before submitting a local land drainage scheme to a water authority under the provisions of paragraph 4(6) or paragraph 6(1) to Schedule 4. I beg to move.

If we could consider Amendment No. 107 with the following one, No. 108, as they go together, the purpose of these Amendments is to give the Minister discretion to allow the membership of a local land drainage committee to exceed the limit of fifteen which is prescribed by paragraph 5(1) of Schedule 4, if he considers this desirable. I beg to move.

§
Amendment moved—
Page 63, line 31, leave out ("A local land drainage scheme shall provide that the") and insert ("Subject to sub-paragraphs (1A) and (1B) below, a local land drainage scheme shall provide that any").— (Earl Ferrers.)

§
Page 63, line 33, at end insert—
("(1A) A regional land drainage committee may include in a local land drainage scheme which they submit to the water authority a recommendation that a committee to which the scheme relates should consist of a number of members greater than fifteen; and a scheme so submitted shall be taken to provide for the number of members of a committee if it contains a recommendation under this subparagraph relating to that committee. (1B) The power conferred on the Minister by paragraph 4(10) above shall include power to direct that a committee to which a recommendation under sub-paragraph (1A) relates shall consist either of the recommended number of members or of some other number of members greater than fifteen.")—(Earl Ferrers.)

§
Page 64, line 50, at end insert—
("( ) A person shall, so long as he is, and for twelve months after he ceases to be, a member of a water authority's regional land drainage committee or any of their local land drainage committees, be disqualified from being appointed to any paid office by the water authority other than the office of chairman of the authority or chairman of their regional land drainage committee or one of their local land drainage committees.")

§
The noble Earl said: This is a technical Amendment to Schedule 4 to correspond with one which has already been put into Schedule 3 at Committee stage in another place to prevent members of a local or regional land drainage committee from accepting paid appointments from the water authority during the time on which they are serving on the Committee and for 12 months thereafter. beg to move.

§EARL FERRERS moved Amendment No. 117A:
Page 70, line 20, at end insert ("or any other water authority").

§
The noble Earl said: Perhaps I could move Amendment No. 117A and speak to 119B, and 119C. These Amendments to Part 4 of Schedule 4 to the Bill are all consequential upon the Government's decision, taken in Committee in another place, to delete from the Bill the original provision which envisaged the possiblity that the London excluded area might be incorporated into the area of the Thames Water Authority for land drainage purposes after 1980. The Amendments are
1336
acceptable to the Greater London Council.

I should like to ask for one point of clarification on Amendment No. 119B. The Amendment to paragraph 16 of Part IV of Schedule 4 applies, inter alia, Clause 7(l) to (4) of the Bill to the G.L.C. as if it were a water authority. I wonder if the noble Earl could say whether the Minister has power under that clause to make an order altering the London excluded area at the instance of the G.L.C.? This seems clearly to be the intention, and the only doubt is that Clause 7, as it has been amended in Committee, contains a reference in subsection 3(a) as inserted in Committee, to subsection (2) under which the order altering the area would be made. The Greater London Council is not to be a water authority for the purposes of subsection (2). If the noble Earl can give the required assurance for the Record I shall be quite content, and I am quite certain that the Greater London Council will be content as well.

EARL FERRERS

I think the noble Lord, Lord Garnsworthy, is concerned that the London excluded area boundary may be adjusted on the recommendation of the G.L.C. under Clause 7 without impediment on the technical ground that the G.L.C. is not a water authority. If that is the problem concerning the noble Lord, I can give him the assurance that in fact his worries are unfounded and that the G.L.C., for these purposes, will be regarded as a water authority.

(a) in paragraph 8, for the word "lie" there shall be substituted the words "immediately before 1st April 1974 lay"; and

(b) in paragraph 15(3), for the definition of the London excluded area there shall be substituted the following definition—

London excluded area" has the meaning assigned to it by section 35 of the Water Act 1973;and notwithstanding anything to the contrary in any enactment or instrument, no part of any of the metropolitan watercourses (within the meaning of that Schedule)").

§
The noble Earl said: This Amendment and No. 124A go together. These are two technical Amendments which bring together in one paragraph all the Amendments necessary to Schedule 14 to the London Government Act 1963, which is the source of most of the G.L.C.'s land drainage powers. I beg to move.

§BARONESS YOUNG moved Amendment No. 119A:
Page 74, line 24, after ("whose") insert ("interest in any").

§
The noble Baroness said: With this Amendment I should like to take Amendments Nos. 120 and 120A. These Amendments are concerned with the power which has been conferred on a local authority, whose land on April 1, 1974, has been transferred to a water authority, to buy back the land on the terms provided by the order if it subsequently ceases to be used by the water authority. The Bill has, in fact, been amended on this point in another place
1338
in order to make it clear that the power to buy it back is not necessarily at market value. The Government have considered this matter and, although they are not in a position at the moment to commit themselves to a view about the terms which would actually apply in a given case, they accept that the wording of the Bill should be as flexible as possible and that the word buy "should be dropped. They wish at the same time to broaden the scope of this provision, so that it will apply to any interest in land which has been conveyed to a water authority on April 1, 1974, and these Amendments achieve that object. I beg to move.

I have an Amendment down later, No. 121, which uses different words from those proposed by the noble Baroness. There is probably no difference between us in what we want to achieve, but I am wondering whether the Government will have another look at this point before Report stage, because there is some concern about it and I have no doubt that my Amendment would ensure that ratepayers were not asked at any time to buy the same piece of land twice over. The noble Baroness is probably fully seized of the point I have in mind and at this time in the evening I have no wish to keep the Committee unduly, so I shall not move my Amendment. But if she can say that the Government have not, as it were, finally closed their minds to further thought on this point, I shall be very grateful.

I hope that I can give the noble Lord, Lord Garnsworthy, that assurance. I understand that the Amendments are designed to meet his point and, as I think I indicated, we have not yet fully made up our minds about the exact terms which would apply in a given case. So I can give the noble Lord the assurance that we shall be considering this matter further.

§
The noble Lord said: This is a very simple Amendment upon which I am sure we need not take up very much time. An officer of the joint sewerage board has expressed a doubt as to whether officers employed by such boards are covered by the terms of paragraphs 6 to 9 of this Schedule. If I can be assured by a word that they are in fact so covered, I will immediately withdraw the Amendment which I now move.

§
Page 86, line 5, at end insert—
32A. For section 20 of that Act (vesting of public sewers and sewage disposal works in a local authority) there shall be substituted the following section:—vesting of sewers and sewage disposal works in water authority.

§
20.—(1) In addition to the sewers and sewage disposal works vested in a water authority by virtue of section 254 or 68 of the Local Government Act 1972, as either section applies for the purposes of the Water Act 1973, there shall vest in a water authority—

(a) all sewers and sewage disposal works constructed by the water authority at their expense, or vested in the authority in pursuance of arrangements under section 15 of the Water Act 1973, or otherwise acquired by the authority;

(b) all sewers constructed under Part IX of the Highways Act 1959, except sewers vested in a county council or the Greater London Council under section 227 of that Act or section 17(5) of the London Government Act 1963;

(c) all sewers and sewage disposal works with respect to which a declaration of vesting under the foregoing provisions of this Part of this Act has taken effect.

§
(2) Sewers which by virtue of the said section 254 or 68 or this section become vested in a water authority shall be known as, and are in this Act referred to as, public sewers."

§
32B. In section 24(4) of the Public Health Act 1936 (lengths of public sewers to which that section applies) references to the local
1341
authority shall be construed, in relation to any area, as references to the local authority who immediately before the commencement of that Act had the function of providing, for the drainage of that area, the sewers within the meaning of the Public Health Act 1875 which by virtue of section 254 or 68 of the 1972 Act, as either section applies for the purposes of this Act, are vested in the water authority in question."

§
The noble Baroness said: This Amendment adds two new paragraphs to Schedule 7 which makes consequential Amendments to the Public Health Act 1936. The first paragraph, paragraph 32A, brings up to date the meaning of the expression "a public sewer"; the second paragraph, paragraph 32B, amends Section 24 of the Act of 1936, which concerns the power of local authorities to recover costs of maintaining certain lengths of public sewer, and in particular subsection (4), which specifies the lengths of public sewer to which this section applies. Subsection (2) of Clause 14 provides that the references to a local authority in enactments relating to sewerage which are listed in the subsection are to be understood as from April 1, 1974, as references to a water authority. I beg to move.

§LORD HAWKE moved Amendment No. 123A:
Page 87, line 4, leave out from beginning to end of line 7.

§
The noble Lord said: This Amendment concerns laundries, and as I am on the board of a company that owns some laundries I have an interest to declare. Since 1905 the laundry industry has been allowed to discharge effluent into the public sewers without charge. This privilege was affirmed by Parliament in the Public Health (Drainage of Trade Premises) Act 1937, Section 4(4), which reads:
The consent of a local authority to the discharge, from any premises into a sewer of the local authority, of any liquid produced solely in the course of laundering articles on those premises shall not be necessary for the purposes of this Act.
In the Bill before us, it is proposed that Section 4(4) shall cease to have effect. When the trade association saw this clause in the Bill they immediately approached the Department and made representations to the Minister, but so far they have not had a considered reply.

§
In order to preserve their right—because they have taken no Parliamentary action to date—they asked me whether I would put down an Amendment at this rather late stage in the legislative progress of the Bill.

§
Laundry effluent has always been considered a rather good sort of effluent to have because the alternative used to be that if you did not get it from the laundry you got it in great dollops every Monday from the housewife, and it was better to have it scattered over the week from the laundry than to have it in one wash on Mondays. Moreover, the laundries in aggregate use less soap to wash the same amount of clothing than the housewife, and so it was considered quite good stuff to have. The laundries were shocked when they discovered that this arrangement that they had had for three generations was going to be finished. They felt that every hand has been against them. First, there was S.E.T. and heavy taxes on fuel and transport by the Labour Government; then V.A.T.; now it is this unknown impost for disposing of their effluent.

§
It is not easy in this particular industry to pass on costs because the housewives pay the laundry bills and, by and large, the housewives are extremely badly done by by their husbands; they rarely get the proper share of any rises that are going around. The housewives always have to look out for methods of economy and one favourite method is to send fewer goods to the laundry. The more you put up laundry charges the less turnover you get. It is difficult to pass on anything in this particular trade. I hope Her Majesty's Government will listen to these people and will not destroy the status quo which has existed for sixty-five years. I beg to move.

I think we have all listened with great interest to the noble Lord, Lord Hawke. I do not feel, interesting as is the subject of washing, that I should at this point tell the Committee what soap powder I use. The noble Lord, Lord Hawke, has correctly stated the history of this matter and what is the position to-day with regard to effluent from laundries. The fact is that they are exempt from the need to obtain consent to discharge effluent and, as a result, are exempt from trade effluent charges.

1343
However, they are liable for general rate and through this they meet part of the costs of sewerage and sewage disposal services provided by the local authority. I think it can be said that the present position is probably not unfair. Of course the position will change when the new authorities become responsible for sewerage and sewage disposal and the cost of those services will be met by charges. My Department, in advising me about this matter, feel that there is no reason at all to exempt laundries from the charges that everybody else will be paying. I think that when one comes to consider the new way of financing water it would indeed be difficult to make out a case particularly for laundries. I can see that they may feel some concern about this rising cost and I can say that for an initial period of a year or two we do not expect that there will be a substantial change in the general structure of charges, but after that the broad principles of charges will come in and by the end of 1981, which is the transitional period, they will have to comply with the principles as set out in Clause 27.

Charges must have regard to costs and show neither undue preference nor discrimination against any class of persons. We have already discussed at considerable length the whole matter of water charges. I should add that when I came to consider this matter I looked again at the report of the Committee of Mrs. Jeger who specifically commented that the volume of discharge from laundries is such that they should be brought under control. I quoted from the Report. I hope that the noble Lord, Lord Hawke, will recognise that this is not singling out laundries for some kind of discrimination; it is simply bringing them in line with what we are asking everyone else to do, and now that the basis of the charge has been altered I hope that he will see the justice of this argument and will feel able to withdraw his Amendment.

LORD HAWKE

I thank my noble friend for her reply. I do not think I can comment on it very much to date. I may remind her that the Minister has power to direct water authorities to take into account in calculating charges such criteria as he may direct, and that is a matter to which he might well turn his
1344
attention. If I had been her, I do not think I should have called in aid the Labour lady's report which suggested controlling the effluent, because, after all, the Labour Party want to control everything, so the effluent is only one step towards that. I will study her reply and see whether it is necessary to put down anything further at the next stage. Mean-while, I beg leave to withdraw the Amendment.

Before the noble Lord does that, I think he might refer a little more politely to the honourable Member in another place, Mrs. Jeger, who has had universal acclaim for a really quite excellent report. I must say that I take exception to the way in which he referred to her and to the work done by herself and the Committee which I think the noble Baroness was quoting with approbation.

LORD HAWKE

I certainly did not wish to cast any aspersions on this lady, and I think if my noble friend had not used the word "control" I should not have made that little joke.

§
50A. In section 2(1) of the Rivers (Prevention of Pollution) Act 1951 for the words "a local authority there shall be substituted the words "a water authority, a harbour authority within the meaning of the Harbours Act 1964 or a development corporation established under the New Towns Act 1965 or any Act replaced by that Act" and for the words the local authority "there shall be substituted the word they ".")

§
The noble Baroness said: I beg to move Amendment No. 123B and to discuss with it Amendment No. 133B. These two Amendments are related and they substitute a reference to a water authority for a reference to a local authority, while preserving references in the 1951 Act to special cases where a harbour authority or development corporation are involved.

This Amendment is necessary to create a similar power in respect of sewerage as a result of a Government decision in another place to introduce a new clause providing for the
1345
requisition of sewerage facilities. This is in line with the requisition of water. I beg to move Amendment No. 124.

§
Page 88, line 35, at end insert—
("50A. In section 2(2) of the Town Development Act 1952 (Exchequer contributions to councils of receiving districts), after paragraph (e), there shall be inserted the following paragraph:—(ee) payments under section 16 of the Water Act 1973 in respect of the provision of a public sewer needed for the purposes or in consequence of the development."").—(Baroness Young.)

I beg to move Amendment No. 125 and with it to discuss Amendment No. 126. These Amendments arise out of the repeal of Section 15 of the Water Resources Act 1963 which would be effected by the Government Amendment to Schedule 8, page 97, line 51.

§
Page 91, line 1, at end insert—
("62A.—(l) In section 16(2) of the Water Resources Act 1963 (inspection and copying of records), for the words from "records kept" to "scheme" there shall be substituted the words any records kept by them of the rainfall, the evaporation of water and the flow, level and volume of inland water and water in underground strata in their area.".(2) In section 16(3) of that Act for the words from "such fees" onwards there shall be substituted the words "such reasonable fees as the authority may determine ".").—(Baroness Young.)

This Amendment specifies more precisely the charges which are relevant. They are charges for the abstraction of water under licence and
1346
not charges for the licence itself. I beg to move Amendment No. 127.

§
Amendment moved—
Page 91, line 19, leave out ("a licence to abstract water granted") and insert ("the abstraction of water under a licence")—(Baroness Young.)

I beg to move Amendment No. 128 and to take with it Amendments No. 129 and 130. The purpose of these Amendments is to improve in the interests of flexibility the provision for the transfer to a water authority of a sewerage or sewage disposal undertaking constructed under new towns legislation.

§
Page 92, line 26, at beginning insert—
("(1) A development corporation for a new town who have, in pursuance of an order under section 34 of this Act, been carrying on a sewerage or sewage disposal undertaking may by agreement with the water authority, and with the consent of the Secretary of State and the Treasury, transfer the whole or any part of the undertaking to that authority.")—(Baroness Young.)

§
72A.—(1) In relation to accidents happening to insured persons (within the meaning of the National Insurance (Industrial Injuries) Act1347
1965) who attend courses or avail themselves of training facilities provided or approved by the Council, sections 7 to 9 of that Act (which make provision for treating certain accidents as arising out of and in the course of an insured person's employment) shall have effect subject to the following modifications.

§
(2)For the purposes of section 7, any act done by the insured person for the purposes of and in connection with his training shall, if it is not done for the purposes of and in connection with his employer's trade or business, be deemed to be so done.

§
(3)For the purposes of section 8, any vehicle (within the meaning of that section) which is operated by or on behalf of the Council or some other person by whom it is provided in pursuance of arrangements made with the Council shall, if not operated and provided as mentioned in subsection (1)(b)(i) of that section, be deemed to be so operated and provided.

§
(4)For the purposes of section 9, any premises at which an insured person is for the time being employed for the purposes of his training shall, if they are not premises at which he is employed for the purposes of his employer's trade or business, be deemed to be such premises."—(Baroness Young.)

§
The noble Baroness said: I beg to move Amendment No. 132, and to take with it Amendments Nos. 133 and 137. The purpose of these Amendments is to remove from Schedule 8 references to existing legislation affecting the Thames and Lee Conservancies, the Metropolitan Water Board and the Isle of Wight River and Water Authority.

§
The noble Baroness said: I beg to move Amendment No. 133A which pro-
1348
vides for the repeal of Section 1(1)(b)of the Rivers (Prevention of Pollution) Act 1951 which dealt specifically with the application of that Act to the Thames and Lee Conservancies and in view of the abolition of those bodies is no longer necessary.

§
The noble Baroness said: I beg to move Amendment No. 133E which is concerned with medical officers of health and public health inspectors who were appointed under the provisions of the Local Government Act 1933. This has been repealed by the Local Government Act 1972, Section 112 of which requires local authorities to appoint such officers as they consider necessary. This means that it is no longer possible to refer to medical officers of health or public health inspectors, and, of course, even if it was, they would not be employees of water authorities.

If beg to move Amendment No. 134, together with Amendments Nos. 135 and 136. These Amendments affect the repeal of a number of provisions in the Water Resources Act 1963 where this is consequential upon the abolition of the Water Resources Board.

§
Page 97, line 51, column 3, leave out ("14") and insert ("15").
line 52, column 3, at end insert—("In section 21, subsections (1) and (2); in subsection (3), the words "and the Water Resources Board"; and in subsection (4), the words from "draft" to "and to".In section 22(3), the words from "the Water Resources Board" to "or", and the words "the Board or" and "as the case may be".")—(Baroness Young.)

§BARONESS YOUNG moved Amendment No. 136A:
Page 99, line 14 leave out ("second appointed day").

§
The noble Baroness said: I beg to move Amendment No. 136A which preserves the definition of the term "second appointed day" in the Water Resources Act 1963, which as the Bill stands at present would be repealed.

§
The noble Baroness said: I beg to move this Amendment, which provides for the repeal of Section 177(1)(b) of the Local Government Act 1972, which applies to river authorities a system of allowances for members, attendance allowance or financial loss allowance contained in Sections 173 to 175 of that Act. These sections are applied to water authorities by paragraph 11(2) of Schedule 3. I beg to move.